The capital accounts of Trent Henry and Tim Chou have balances of $145,500 and $98,300, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry’s interest for $29,100 and one-fourth of Chou’s interest for $19,500. Clarke contributes $74,500 cash to the partnership, for which she is to receive an ownership equity of $74,500. CHART OF ACCOUNTS Henry, Chou, Gilbert, and Clarke General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Interest Receivable 115 Notes Receivable 116 Inventory 117 Office Supplies 118 Store Supplies 119 Prepaid Insurance 120 Land 123 Equipment 124 Accumulated Depreciation-Equipment 129 Asset Revaluations 133 Patent REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Equipment 523 Delivery Expense 524 Repairs Expense 529 Selling Expenses 531 Rent Expense 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Trent Henry, Capital 311 Trent Henry, Drawing 312 Tim Chou, Capital 313 Tim Chou, Drawing 314 LeAnne Gilbert, Capital 315 LeAnne Gilbert, Drawing 316 Becky Clarke, Capital 317 Becky Clarke, Drawing a. On December 31, journalize the entries to record the admission of (1) Gilbert and (2) Clarke. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. b. What are the capital balances of each partner after the admission of the new partners? Partner Capital Balance Trent Henry, Capital Tim Chou, Capital LeAnne Gilbert, Capital Becky Clarke, Capital Please Answer All Questions.

The capital accounts of Trent Henry and Tim Chou have balances of $145,500 and $98,300, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry’s interest for $29,100 and one-fourth of Chou’s interest for $19,500. Clarke contributes $74,500 cash to the partnership, for which she is to receive an ownership equity of $74,500. CHART OF ACCOUNTS Henry, Chou, Gilbert, and Clarke General Ledger ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Interest Receivable 115 Notes Receivable 116 Inventory 117 Office Supplies 118 Store Supplies 119 Prepaid Insurance 120 Land 123 Equipment 124 Accumulated Depreciation-Equipment 129 Asset Revaluations 133 Patent REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Equipment 523 Delivery Expense 524 Repairs Expense 529 Selling Expenses 531 Rent Expense 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Trent Henry, Capital 311 Trent Henry, Drawing 312 Tim Chou, Capital 313 Tim Chou, Drawing 314 LeAnne Gilbert, Capital 315 LeAnne Gilbert, Drawing 316 Becky Clarke, Capital 317 Becky Clarke, Drawing a. On December 31, journalize the entries to record the admission of (1) Gilbert and (2) Clarke. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. b. What are the capital balances of each partner after the admission of the new partners? Partner Capital Balance Trent Henry, Capital Tim Chou, Capital LeAnne Gilbert, Capital Becky Clarke, Capital Please Answer All Questions.

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

CHART OF ACCOUNTS

Henry, Chou, Gilbert, and Clarke

General Ledger

ASSETS
110	Cash
111	Petty Cash
112	Accounts Receivable
113	Allowance for Doubtful Accounts
114	Interest Receivable
115	Notes Receivable
116	Inventory
117	Office Supplies
118	Store Supplies
119	Prepaid Insurance
120	Land
123	Equipment
124	Accumulated Depreciation-Equipment
129	Asset Revaluations
133	Patent

REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
531	Rent Expense
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

EQUITY
310	Trent Henry, Capital
311	Trent Henry, Drawing

312	Tim Chou, Capital
313	Tim Chou, Drawing
314	LeAnne Gilbert, Capital

315	LeAnne Gilbert, Drawing
316	Becky Clarke, Capital

317	Becky Clarke, Drawing

a. On December 31, journalize the entries to record the admission of (1) Gilbert and (2) Clarke. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

b. What are the capital balances of each partner after the admission of the new partners?

Partner	Capital Balance
Trent Henry, Capital
Tim Chou, Capital
LeAnne Gilbert, Capital
Becky Clarke, Capital

Please Answer All Questions.

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