Partner A Partner B Dr Cr Dr Cr Cash $ 13,000.00 $ 11,000.00 Acc. Rec $ 16,000.00 $ 24,000.00
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
I have a scenario where a partnership is forming. The equipment was origially valued at $41000 with the
I tried to get this done in a chat but was disconnected. I thought that if I setup the
| Partner A | Partner B | |||||||
|---|---|---|---|---|---|---|---|---|
| Dr | Cr | Dr | Cr | |||||
| Cash | $ 13,000.00 | $ 11,000.00 | ||||||
| Acc. Rec | $ 16,000.00 | $ 24,000.00 | ||||||
| Allowance for doubtful accts. | $ 2,800.00 | $ 4,000.00 | ||||||
| Inventory | $24,500.00 | $16,900.00 | ||||||
| Equipment | $ 41,000.00 | $ 27,000.00 | ||||||
| Accum. Depr.-Equip | $22,100.00 | $10,100.00 | ||||||
| Notes Payable | $ 16,600.00 | $ 13,800.00 | ||||||
| Accts Payable | $ 20,200.00 | $ 28,500.00 | ||||||
| Partner A Capital | $ 32,800.00 | |||||||
| Partner B Capital | $ 22,500.00 | |||||||
| $ 94,500.00 | $ 94,500.00 | $ 78,900.00 | $ 78,900.00 |
| Partner A and Partner B decide to form a partnership, Sandhill Company, with the following agreed upon valuations for noncash assets. |
| Partner A | Partner B | ||
| Acc. Rec | $16,000.00 | $24,000.00 | |
| Allowance for doubtful accts. | $4,100.00 | $3,700.00 | |
| Inventory | $25,800.00 | $18,400.00 | |
| Equipment | $23,000.00 | $13,800.00 |
|
All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships. Prepare separate |
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