PARTNERSHIP FORMATION - Handout 12-1B Held and Kamp decide to merge their proprietorships into a partnership called HeldKamp Company. The balance sheet of Kamp Co. shows: $15,000 Accounts receivable Less: Allowance for doubtful accounts Equipment Less: Accumulated depreciation 1200 $13,800 $20,000 8.000 12,000 The partners agree that the net realizable value of the receivables is $12,500 and that the fair market value of the equipment is $10,000 Prepare the journal entry to record the initial investment of Kamp. SOLUTION HINTS These non-cash assets should be recorded at their fair value. Remember, accumulated depreciation is not carried into the partnership books. A revised Allowance for Doubtful Accounts balance will need to be determined and will be journalized Cr. Ka mp, Cap. $22,500
PARTNERSHIP FORMATION - Handout 12-1B Held and Kamp decide to merge their proprietorships into a partnership called HeldKamp Company. The balance sheet of Kamp Co. shows: $15,000 Accounts receivable Less: Allowance for doubtful accounts Equipment Less: Accumulated depreciation 1200 $13,800 $20,000 8.000 12,000 The partners agree that the net realizable value of the receivables is $12,500 and that the fair market value of the equipment is $10,000 Prepare the journal entry to record the initial investment of Kamp. SOLUTION HINTS These non-cash assets should be recorded at their fair value. Remember, accumulated depreciation is not carried into the partnership books. A revised Allowance for Doubtful Accounts balance will need to be determined and will be journalized Cr. Ka mp, Cap. $22,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:PARTNERSHIP FORMATION - Handout 12-1B
Held and Kamp decide to merge their proprietorships into a partnership called
HeldKamp Company. The balance sheet of Kamp Co. shows:
$15,000
Accounts receivable
Less: Allowance for doubtful accounts
Equipment
Less: Accumulated depreciation
1200 $13,800
$20,000
8.000 12,000
The partners agree that the net realizable value of the receivables is $12,500 and
that the fair market value of the equipment is $10,000
Prepare the journal entry to record the initial investment of Kamp.
SOLUTION HINTS
These non-cash assets should be recorded at their fair value. Remember,
accumulated depreciation is not carried into the partnership books. A revised
Allowance for Doubtful Accounts balance will need to be determined and will be
journalized
Cr.
Ka
mp, Cap. $22,500
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