Raúl and Rigoberto decide to form a partnership combining the assets of their own businesses. Raúl contributes with the following assets: Cash $ 20,000 Accounts receivable 170,000 Allow For doubtful account -10,500 Inventory 150,000 Equipment (cost) 200,000 Accumm Depreciation -155,000 The partners agreed: -Do not accept $ 5,000 from accounts receivable as they have no value (“worthless”). -That $ 12,500 is a reasonable provision (‘allowance”) for uncollectible accounts. -That the inventory must be recorded at its current market value of $ 122,000. -That the equipment should be valued at $ 63,500. Required: Record the journal entry for Raúl's investment.
Raúl and Rigoberto decide to form a partnership combining the assets of their own businesses. Raúl contributes with the following assets: Cash $ 20,000 Accounts receivable 170,000 Allow For doubtful account -10,500 Inventory 150,000 Equipment (cost) 200,000 Accumm Depreciation -155,000 The partners agreed: -Do not accept $ 5,000 from accounts receivable as they have no value (“worthless”). -That $ 12,500 is a reasonable provision (‘allowance”) for uncollectible accounts. -That the inventory must be recorded at its current market value of $ 122,000. -That the equipment should be valued at $ 63,500. Required: Record the journal entry for Raúl's investment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Raúl and Rigoberto decide to form a partnership combining the assets of their own businesses. Raúl contributes with the following assets:
Cash $ 20,000
Accounts receivable 170,000
Allow For doubtful account -10,500
Inventory 150,000
Equipment (cost) 200,000
Accumm Depreciation -155,000
The partners agreed:
-Do not accept $ 5,000 from accounts receivable as they have no value (“worthless”).
-That $ 12,500 is a reasonable provision (‘allowance”) for uncollectible accounts.
-That the inventory must be recorded at its current market value of $ 122,000.
-That the equipment should be valued at $ 63,500.
Required:
Record the journal entry for Raúl's investment.
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