Question 1 Partnership FormationOn 1st July 2024 Eva and Fred form a partnership agreeing to value theircapital contributions as $200 000.Eva' capital contribution:Motor vehicle $35 000Premises $100,000As Payable $10,000Inventory $75.000Fred's capital contribution:Cash$55,000Equipment$85,000Debtors$22,000It was agreed to value a Debtors of Fred at $20,000Required:a.Complete the general journal entries to record the formation of the Evaand Fred partnership on 1st July 2024b. Prepare a Balance sheet of the partnership of Eva and Fred at 1st July2024a. General Journal Eva and FredDateParticularsDebitCredit

Part 2: Explanation:Step 1: General Journal Entries- In the formation of the partnership, Eva…

Answered: Question 1 Partnership Formation On 1st…

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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Question 2 Brown, Blue, and Black are in partnership sharing profit and losses in the ratio 2:1:2. The balance sheet for the partnership as of April 15, 2019, was as follows: $ Non-current assets Land Buildings Equipment Current assets Inventory Accounts receivable Cash Total assets Capital account Brown Blue Black Non-current liabilities Mortgage on building Current liabilities Accounts payable Total liabilities 360,000 1,260,000 234,000 108,000 45,000 36,000 315,000 108,000 450,000 1,080,000 90,000 $ 1,854,000 Required: Prepare the following ledger accounts for the dissolution of the partnership: a) Realization account b) Bank account c) Partner's capital account 189,000 2,043,000 873,000 1,080,000 90,000 2,043,000 The partners agreed to dissolve the partnership on April 15, 2019 on the following conditions: Sold the inventory for $72,000, collected $48,000 on accounts receivable and wrote off the remaining accounts, sold equipment for $192,000 and building and land for $1,200,000,…
Partner capital accounts upon formation of partnership-Goodwill Method Assume that two individuals agree to form a partnership. Partner A is contributing an operating business that reports net assets of $30,000. Partner B is contributing cash of $45,000. The partners agree that the initial capital of the partnership should be shared equally. What will be the initial balance of the Capital Accounts of the partners assuming that the partners wish to employ the Goodwill Method? Select one: a. Partner A Partner B $90,000 $90,000 b. Partner A Partner B $37,500 $37,500 c. Partner A Partner B $45,000 $45,000 d. Partner A Partner B $30,000 $45,000
3
Soultion for Part B Part B (2020) a. On December 31, 2020 new partner D invests other assets into the partnership for a one-quarter ownership interest. An equal amount of capital is contributed by A, B, and C to make up the difference. At December 31, 2020, the partners' capital balances are as follows: A $200,000 B 180,000 C 190,000 $ 570,000 Fair value of other assets from D $50,000 b. Immediately after this, partner C withdraws from the partnership. She is paid in cash the balance in her capital account plus a bonus, contributed equally from the capital balances of A, B, and D. Bonus paid to C $ 18,000 Required 5 Prepare necessary adjusting entries at December 31, 2020 to record the admission of…
Ending Partner balances Burns and Allan have formed a partnership and invested $20.000 and $40,000, respectively. They have agreed to share profits as follows: 1) Burns is to receive a "salary" of $20.000 and Allan is to receive a "salary" of $30,000. 2) $30.000 is to be allocated according to their original capital contributions to the partnership. 3) The remainder is to be allocated 2:3 respectively Assuming that the business had a loss of $15000, allocate the loss to Burns and Allan.

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