When Alice and Betty decided to incorporate their partnership, its trial balance was as follows: Debit $ 8,100 24,300 36,300 47,800 Cash Accounts Receivable (net) Inventory Equipment (net) Accounts Payable Alice, Capital (60%) Betty, Capital (40%) Total Accounts Receivable Inventory Equipment Credit $ 17,600 64,400 34,500 $ 116,500 $ 116,500 The partnership's books will be closed, and new books will be used for A & B Corporation. The following additional information is available: 1. The estimated fair values of the assets follow: $ 23,500 33,100 40,600 2. All assets and liabilities are transferred to the corporation. 3. The common stock is $10 par. Alice and Betty receive a total of 7,400 shares. 4. The partners' profit and loss-sharing ratio is shown in the trial balance. Required: 6. Prepare the entries on the partnership's books to record (1) the revaluation of assets, (2) the transfer of the assets to A & B Corporation and the receipt of the common stock, and (3) the closing of the books. b. Prepare the entries on A & B Corporation's books to record the assets and the issuance of the common stock.
When Alice and Betty decided to incorporate their partnership, its trial balance was as follows: Debit $ 8,100 24,300 36,300 47,800 Cash Accounts Receivable (net) Inventory Equipment (net) Accounts Payable Alice, Capital (60%) Betty, Capital (40%) Total Accounts Receivable Inventory Equipment Credit $ 17,600 64,400 34,500 $ 116,500 $ 116,500 The partnership's books will be closed, and new books will be used for A & B Corporation. The following additional information is available: 1. The estimated fair values of the assets follow: $ 23,500 33,100 40,600 2. All assets and liabilities are transferred to the corporation. 3. The common stock is $10 par. Alice and Betty receive a total of 7,400 shares. 4. The partners' profit and loss-sharing ratio is shown in the trial balance. Required: 6. Prepare the entries on the partnership's books to record (1) the revaluation of assets, (2) the transfer of the assets to A & B Corporation and the receipt of the common stock, and (3) the closing of the books. b. Prepare the entries on A & B Corporation's books to record the assets and the issuance of the common stock.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vishnu
Transcribed Image Text:When Alice and Betty decided to incorporate their partnership, its trial balance was as follows:
Cash
Accounts Receivable (net)
Inventory
Equipment (net)
Accounts Payable
Alice, Capital (60%).
Betty, Capital (40%)
Total
Debit
$ 8,100
24,300
36,300
47,800
Credit
$ 17,600
64,400
34,500
$116,500 $ 116,500
$ 23,500
33,100
40,600
The partnership's books will be closed, and new books will be used for A & B Corporation. The following additional information is
available:
1. The estimated fair values of the assets follow:
Accounts Receivable.
Inventory
Equipment
2. All assets and liabilities are transferred to the corporation.
3. The common stock is $10 par. Alice and Betty receive a total of 7,400 shares.
4. The partners' profit and loss-sharing ratio is shown in the trial balance.
Required:
a. Prepare the entries on the partnership's books to record (1) the revaluation of assets, (2) the transfer of the assets to A & B
Corporation and the receipt of the common stock, and (3) the closing of the books.
b. Prepare the entries on A & B Corporation's books to record the assets and the issuance of the common stock.
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