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Ron Marden and Tip Baker operate separate auto repair shops. On January 1, 2020, they decide to combine their separate businesses which were operated as proprietorships to form M & B Auto Repair, a partnership. Information from their separate balance sheets is presented below: Cash Accounts receivable Allowance for doubtful accounts Accounts payable Notes payable Salaries and wages payable Equipment Accumulated depreciation-equipment Marden Auto Repair Baker Auto Repair $10,000 $14,000 12,000 10,000 500 6,000 3,000 1,500 24,000 4,000 1,000 5,000 1,000 12,000 2,000 It is agreed that the expected realizable value of Marden's accounts receivable is $11,000 and Baker's receivables is $7,000. The fair value of Marden's equipment is $13,000 and the value of Baker's equipment is $20,000. It is further agreed that the new partnership will assume all liabilities of the proprietorships with the exception of the notes payable on Baker's balance sheet which he will pay himself. A partnership agreement is signed by both Marden and Barker to consummate this business venture. First year partnership financial operations are: Revenues were $15,000, expenses were $3,400, and Marden and Baker had drawings of $800 and $1,300, respectively. Answer the following questions using the information provided. After the formation of M & B Auto Repair, January account balances are cash accounts receivable ; allowance for

Ron Marden and Tip Baker operate separate auto repair shops. On January 1, 2020, they decide to combine their separate businesses which were operated as proprietorships to form M & B Auto Repair, a partnership. Information from their separate balance sheets is presented below: Cash Accounts receivable Allowance for doubtful accounts Accounts payable Notes payable Salaries and wages payable Equipment Accumulated depreciation-equipment Marden Auto Repair Baker Auto Repair $10,000 $14,000 12,000 10,000 500 6,000 3,000 1,500 24,000 4,000 1,000 5,000 1,000 12,000 2,000 It is agreed that the expected realizable value of Marden's accounts receivable is $11,000 and Baker's receivables is $7,000. The fair value of Marden's equipment is $13,000 and the value of Baker's equipment is $20,000. It is further agreed that the new partnership will assume all liabilities of the proprietorships with the exception of the notes payable on Baker's balance sheet which he will pay himself. A partnership agreement is signed by both Marden and Barker to consummate this business venture. First year partnership financial operations are: Revenues were $15,000, expenses were $3,400, and Marden and Baker had drawings of $800 and $1,300, respectively. Answer the following questions using the information provided. After the formation of M & B Auto Repair, January account balances are cash accounts receivable ; allowance for

FINANCIAL ACCOUNTING
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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Ron Marden and Tip Baker operate separate auto repair shops. On January 1, 2020, they decide to combine their separate businesses which were operated as proprietorships to form M & B Auto Repair, a partnership. Information from their separate balance sheets is presented below: Cash Accounts receivable Allowance for doubtful accounts Accounts payable Notes payable Salaries and wages payable Equipment Accumulated depreciation-equipment Marden Auto Repair $10,000 12,000 1,000 5,000 equity of 1,000 12,000 2,000 It is agreed that the expected realizable value of Marden's accounts receivable is $11,000 and Baker's receivables is $7,000. The fair value of Marden's equipment is $13,000 and the value of Baker's equipment is $20,000. It is further agreed that the new partnership will assume all liabilities of the proprietorships with the exception of the notes payable on Baker's balance sheet which he will pay himself. ; accounts payable ; total liabilities Baker Auto Repair $14,000 10,000 500 6,000 3,000 1,500 A partnership agreement is signed by both Marden and Barker to consummate this business venture. First year partnership financial operations are: Revenues were $15,000, expenses were $3,400, and Marden and Baker had drawings of $800 and $1,300, respectively. Answer the following questions using the information provided. After the formation of M & B Auto Repair, January account balances are cash doubtful accounts equipment 24,000 4,000 After the first year of operations, Marden's share of net income is be and Baker's ending capital is accounts receivable accumulated depreciation - equipment ; salaries and wages payable Marden's capital ; notes payable ;Baker's capital and Baker will receive at the end of first year's operation. allowance for Assume on 1/1/2021 Bobby invests cash of $29,000 in M & B auto to become the third partner for a 20% interest stake, the capital balances are - Marden is Baker is and Bobby is total assets and total Marden's ending capital will
Transcribed Image Text:Ron Marden and Tip Baker operate separate auto repair shops. On January 1, 2020, they decide to combine their separate businesses which were operated as proprietorships to form M & B Auto Repair, a partnership. Information from their separate balance sheets is presented below: Cash Accounts receivable Allowance for doubtful accounts Accounts payable Notes payable Salaries and wages payable Equipment Accumulated depreciation-equipment Marden Auto Repair $10,000 12,000 1,000 5,000 equity of 1,000 12,000 2,000 It is agreed that the expected realizable value of Marden's accounts receivable is $11,000 and Baker's receivables is $7,000. The fair value of Marden's equipment is $13,000 and the value of Baker's equipment is $20,000. It is further agreed that the new partnership will assume all liabilities of the proprietorships with the exception of the notes payable on Baker's balance sheet which he will pay himself. ; accounts payable ; total liabilities Baker Auto Repair $14,000 10,000 500 6,000 3,000 1,500 A partnership agreement is signed by both Marden and Barker to consummate this business venture. First year partnership financial operations are: Revenues were $15,000, expenses were $3,400, and Marden and Baker had drawings of $800 and $1,300, respectively. Answer the following questions using the information provided. After the formation of M & B Auto Repair, January account balances are cash doubtful accounts equipment 24,000 4,000 After the first year of operations, Marden's share of net income is be and Baker's ending capital is accounts receivable accumulated depreciation - equipment ; salaries and wages payable Marden's capital ; notes payable ;Baker's capital and Baker will receive at the end of first year's operation. allowance for Assume on 1/1/2021 Bobby invests cash of $29,000 in M & B auto to become the third partner for a 20% interest stake, the capital balances are - Marden is Baker is and Bobby is total assets and total Marden's ending capital will
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