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What is the journal entry to record the formation of the partnership? Charlie and Brown form a partnership and invest the following assets and liabilities Fair Market Value Carrying Value Mary Cash $ 50,000 $50,000 Land 70,000 40,000 Dawn Cash 16,000 16,000 Building 100,000 90,000 Mortgage Payable (60,000) (60,000) Assuming that the partners will share income and losses equally, prepare the entry to record the formation of the partnership.

FINANCIAL ACCOUNTING

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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What is the journal entry to record the formation of the partnership?

Charlie and Brown form a partnership and invest the following assets and liabilities

	Fair Market Value	Carrying Value
Mary
Cash	$ 50,000	$50,000
Land	70,000	40,000

Dawn
Cash	16,000	16,000
Building	100,000	90,000
Mortgage Payable	(60,000)	(60,000)

Assuming that the partners will share income and losses equally, prepare the entry to record the formation of the partnership.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.

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Problem-solving Admissionby Purchase of Interest or Investment of AssetsAngeles. Bondoc and Campos have equities in a partnership as follows: Angeles 300,000 Bondoc 750,000 Campos 700.000 and share of profits and losses in a ration of 5.3.2, respectively. The partners have agreed to admit Dantes to the partnership REQUIRED Prepare the journal entries to record the admission of Dantes to the partnership under each of the following assumptions.1. Dantes paid Angeles P450.000 for his full interest 2. Dantes invested P500,000 for a 25% interest, and bonus is recorded for Dantes 3 Dantes invested P600,000 for a 20% interest, and bonus is recorded for the old partners.
Jennifer DeVine and Stanley Farrin decide to organize the ALL-Star partnership. DeVine invests $25,000 cash, and Farrin contributes $20,000 cash and equipment having a book value of $5,500. Prepare the entry to record Farrin’s and DeVine’s investment in the partnership, assuming the Ferrin’s equipment has a fair market value of $9,000
After the tangible assets have been adjusted to current market prices, the capital accounts of Grayson Jackson and Harry Barge have balances of $64,900 and $86,500, respectively. Lewan Gorman is to be admitted to the partnership, contributing $43,300 cash to the partnership, for which he is to receive an ownership equity of $50,500. All partners share equally in income. a. Journalize the entry to record the admission of Gorman, who is to receive a bonus of $7,200. If an amount box does not require an entry, leave it blank. Cash Grayson Jackson, Capital Harry Barge, Capital Lewan Gorman, Capital b. What are the capital balances of each partner after the admission of the new partner? Partner Balance Grayson Jackson $ Harry Barge $ Lewan Gorman $

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