Penner and Torres decide to merge their proprietorships into a partnership called Crane Company. The balance sheet of Torres Co.shows:Accounts receivableLess: Allowance for doubtful accountsEquipmentLess: Accumulated depreciation-equip.Accounts Receivable$17,000Less : Allowance for Doubtful AccountsEquipment1,19037,00012,950The partners agree that the net realizable value of the receivables is $14,280 and that the fair value of the equipment is $20,350.Indicate how the accounts should appear in the opening balance sheet of the partnership.$15,81024,050Crane Company.Balance Sheet (Partial)17,00012,950$24,05020,350

Balance sheet is the financial statement prepared by an entity to show its financial position. It…

Answered: Penner and Torres decide to merge their…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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As part of the initial investment, Jackson contributes accounts receivable that had a balance of $40,480 in the accounts of a sole proprietorship. Of this amount, $1,308 is deemed completely worthless. For the remaining accounts, the partnership will establish a provision for possible future uncollectible accounts of $655. The amount debited to Accounts Receivable for the new partnership is
Culver invests personally owned equipment, which originally cost $224700 and has accumulated depreciation of $59900 in the Culver and Eggers partnership. Both partners agree that the fair value of the equipment was $119700. The entry made by the partnership to record Culver's investment should be Equipment Accumulated Depreciation-Equipment Culver, Capital 224700 59900 164800 Equipment 119700 Culver, Capital 119700 Equipment 164800 Culver, Capital 164800 Equipment 119700 Loss on Purchase of Equipment 45100 Accumulated Depreciation-Equipment 59900 Culver, Capital 224700
200. On December 1, 2014, MG and AN are combining their separate businesses to form a partnership. Cash and noncash assets are to be contributed. The noncash assets to be contributed and the liabilities to be assumed are as follows: Accounts Receivable Inventory PPE Accounts Payable MG Book value 250,000 400,000 1,000,000 150,000 A. 1,344,000 B. 1,244,000 C. 3,120,000 D. 2,180,000 Fair value 262,500 450,000 912,500 150,000 AN Book value 200,000 200,000 862,500 112,500 Fair value 195,000 207,500 822,500 112,500 MG and AN are to invest equal amount of cash such that the contribution of MG would be 10% more than the investment of AN. What is the amount of cash presented on the partnership's statement of Financial Position on December 1, 2014?

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