Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 12, Problem 2E
To determine
Record the
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
S. Stephens and J. Perez are partners in Space Designs. Stephens and Perez share income equally. D. Fredricks will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $8,000. The capital balances of each partner are $100,000 and $139,000, respectively, prior to the revaluation. Show me your work.
How do you provide the journal entry for the asset revaluation..
How do you provide the journal entry for Fredricks’ admission under the following independent situations
1.Fredricks purchased a 20% interest for $50,000.
2.Fredricks purchased a 30% interest for $125,000
L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and Lipscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $8,000. The capital balances of each partner are $96,000 and $40,000, respectively, prior to the revaluation.a. Provide the journal entry for the asset revaluation.b. Provide the journal entry for Ortiz’s admission under the following independent situations:1. Ortiz purchased a 20% interest for $20,000.2. Ortiz purchased a 30% interest for $60,000.
Mike Derr and Mark Finger form a partnership by combining assets of their separate businesses. The followingbalance sheet is from Derr’s sole proprietorship. The market value of Derr’s equipment is $5,000and the market value of land is $8,000. Prepare the partnership’s journal entry to record Derr’s investment.
Chapter 12 Solutions
Financial Accounting
Ch. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 1PEACh. 12 - Prob. 1PEBCh. 12 - Prob. 2PEACh. 12 - Prob. 2PEBCh. 12 - Prob. 3PEACh. 12 - Prob. 3PEBCh. 12 - Prob. 4PEACh. 12 - Prob. 4PEBCh. 12 - Prior to liquidating their partnership, Parker and...Ch. 12 - Liquidating partnerships Prior to liquidating...Ch. 12 - Prob. 6PEACh. 12 - Prob. 6PEBCh. 12 - Prob. 7PEACh. 12 - Eclipse Architects earned 1,800,000 during 2016...Ch. 12 - Prob. 1ECh. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Marvel Media, LLC, has three members: WLKT...Ch. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 16ECh. 12 - Prob. 17ECh. 12 - The statement of members equity for Bonanza, LLC,...Ch. 12 - Distribution of cash upon liquidation Hewitt and...Ch. 12 - Distribution of cash upon liquidation David Oliver...Ch. 12 - Liquidating partnershipscapital deficiency Lewis,...Ch. 12 - Prob. 22ECh. 12 - Prob. 23ECh. 12 - Statement of partnership liquidation After closing...Ch. 12 - Prob. 25ECh. 12 - Prob. 26ECh. 12 - The accounting firm of Deloitte Touche is the...Ch. 12 - Prob. 28ECh. 12 - Prob. 1PACh. 12 - Prob. 2PACh. 12 - Prob. 3PACh. 12 - Prob. 4PACh. 12 - Statement of partnership liquidation After the...Ch. 12 - Prob. 6PACh. 12 - Prob. 1PBCh. 12 - Prob. 2PBCh. 12 - Prob. 3PBCh. 12 - Prob. 4PBCh. 12 - Statement of partnership liquidation After the...Ch. 12 - On August 3, the firm of Chapelle, Rock, and Pryor...Ch. 12 - Prob. 1CPCh. 12 - Prob. 2CPCh. 12 - Prob. 3CPCh. 12 - Prob. 4CP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Jen Novinska and Jeff Quinlan form a partnership by combining assets of their separate businesses. The following balance sheet is from Novinska’s sole proprietorship. The market value of Novinska’s equipment is $1,000 and the market value of land is $1,600. Prepare the partnership’s journal entry to record Novinska’s investment.arrow_forwardAfter 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 $arrow_forwardAfter the tangible assets have been adjusted to current market prices, the capital accounts of Grayson Jackson and Harry Barge have balances of $76,000 and $122,000, respectively. Lewan Gorman is to be admitted to the partnership, contributing $51,000 cash to the partnership, for which he is to receive an ownership equity of $66,000. All partners share equally in income. a. Journalize the entry to record the admission of Gorman, who is to receive a bonus of $15,000. If an amount box does not require an entry, leave it blank. b. What are the capital balances of each partner after the admission of the new partner? Partner Balance Grayson Jackson Harry Barge Lewan Gorman c. Why are tangible assets adjusted to current market prices prior to admitting a new partner? Tangible assets should be adjusted to current market prices so that the new partner any gains or losses from changes in market prices prior to being admitted. For example, if the market price of land doubled prior to admitting…arrow_forward
- As part of the initial investment, Jackson contributes accounts receivable that had a balance of $29,421 in the accounts of a sole proprietorship. Of this amount, $1,403 is deemed completely worthless. For the remaining accounts, the partnership will establish a provision for possible future uncollectible accounts of $888. The amount debited to Accounts Receivable for the new partnership is a.$28,533 b.$27,130 c.$28,018 d.$29,421arrow_forwardAs part of the initial investment, Jackson contributes accounts receivable that had a balance of $32,700 in the accounts of a sole proprietorship. Of this amount, $1,474 is deemed completely worthless. For the remaining accounts, the partnership will establish a provision for possible future uncollectible accounts of $810. The amount debited to Accounts Receivable for the new partnership is O a $32,700 O b. $31,890 O c. $30,416 O d. $31,226arrow_forwardAfter 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. b. What are the capital balances of each partner after the admission of the new partner? Partner Grayson Jackson Harry Barge Lewan Gorman Balance c. Why are tangible assets adjusted to current market prices prior to admitting a new partner? Tangible assets should be adjusted to current market prices so that the new partner admitted. For example, if the market price of land doubled prior to admitting new partners, their capital accounts prior to the new partners'…arrow_forward
- Nancy Finch has been operating an apartment-locator service as a sole proprietorship. She and Melissa Michaels have decided to form a partnership. Finch's contribution consists of Cash, $3,000; Accounts Receivable $9,000; Fumiture, $13,000; Building (net), $58,000; and Notes Payable, $21,000. To determine Finch's equity in the partnership, she and Michaels hire an independent appraiser. The appraiser values all the assets and liabilities at their book value, except the building, which has a current market value of $96,000. Also, there are additional Accounts Payable of $10,000 that Finch will contribute. Michaels will contribute cash equal to Finch's equity in the partnership. Read the requirements ge Requirement 1. Journalize the entry on the partnership books to record Finch's contribution. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) ur - X Date Accounts and Explanation Debit Credit Requirements 1. Journalize the entry on…arrow_forwardAnd the following accounts and balances were taken from the records of Caloy: Cash P 32,354 Accounts Receivable 577,890 Other Assets 13,600 Inventories 270,102 Accounts Payable 253,650 Building 438,267 Notes Payable 355,000 Furniture and Fixtures 44,789 Caloy, capital 738,352 Bonbon and Caloy agreed to form a partnership by contributing their respective assets and equities subject to the following adjustments: a) Inventories of P6,500 and P6,700 are worthless in Bonbon's and Caloy's respective books. b) Accounts Receivable of P25,000 Bonbon's book and P30,000 in Caloy's book are uncollectible. c) Other assets of P4,000 and P6,000 in Bonbon and Caloy's respective books are to be written off. d. The partnership assumes the unrecorded mortgage on the building, P45, 500 How much is the total liabilities to be assumed by the partnership?arrow_forwardThe partnership of Avery and Kirk was formed on July 1, when George Avery and Dinah Kirk agreed to invest equal amounts and to share profits and losses equally. The investment by Avery consist of $30,000 cash and an inventory of merchandise valued at $56,000. Kirk also is to contribute a total of $86,000. However, it is agreed that her contribution will consist of the transfer of both assets of her business and its liabilities (listed as follows). A list of the agreed values of the various items as well as their carrying values on Kirk’s records follows. Kirk also contributes enough cash to bring her capital account to $86,000 Investment by Kirk Balances Agreed on Kirk’s records Value Accounts receivables $81,680 $79,600 Inventory…arrow_forward
- Barbara Ripley and Fred Nichols decide to organize the ALL-Star partnership. Ripley invests $24,000 cash, and Nichols contributes $10,000 cash and equipment having a book value of $5,120. Prepare the entry to record Nichols's investment in the partnership, assuming the equipment has a fair value of $6.400. (Credit account titles are automatically indented when amount is entered. Do not indent manually) Account Titles and Explanation Debit Creditarrow_forwardCarmelo Fernandez and Bobby Morett formed a partnership, investing $67,500 and $202,500, respectively. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Determine their participation in the year's net income of $275,000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 6% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $40,000 and $49,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $40,000 and $ 49,000, respectively, and the remainder divided equally.arrow_forwardSuppose that Juma and Khamis form a partnership to sell yard equipment. Juma contributes cash of OMR25,000 and office furniture with a cost of OMR15,000, accumulated depreciation of OMR5,000, and a current market value of OMR8,000. The journal entry correctly records Juma's contribution to the partnership would be:arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
