uzy Vopat has owned and operated a proprietorship for several years. On January 1, she decides to terminate this business and become a partner in the firm of Vopat and Karen. Vopat’s investment in the partnership consists of $12,000 in cash, and the following assets of the proprietorship: accounts receivable $14,000 less allowance for doubtful accounts of $2,000, and equipment $30,000 less accumulated depreciation of $4,000. It is agreed that the allowance for doubtful accounts should be $3,000 for the partnership. The fair value of the equipment is $23,500. Determine the capital balance of Suzy Vopat in the partnership if the partnership also agrees to assume Suzy Vopat's s sole proprietorship’s liabilities of $25,000.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Suzy Vopat has owned and operated a proprietorship for several years. On January 1, she decides
to terminate this business and become a partner in the firm of Vopat and Karen. Vopat’s investment
in the
receivable $14,000 less allowance for doubtful accounts of $2,000, and equipment $30,000 less accumulated
depreciation of $4,000. It is agreed that the allowance for doubtful accounts should be $3,000 for
the partnership. The fair value of the equipment is $23,500. Determine the capital balance of Suzy Vopat in the partnership if the partnership also agrees to assume Suzy Vopat's s sole proprietorship’s liabilities of $25,000.
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