Actor, Brees, and Cotswald are forming The ABC Partnership. Actor is transferrin

Question

Actor, Brees, and Cotswald are forming The ABC Partnership. Actor is transferring $40,000 of personal cash and equipment worth $38,000 to the partnership. Brees owns land worth $27,000 and a small building worth $112,000, which he transfers to the partnership. There is a long-term mortgage of $40,000 on the land and building, which the partnership assumes. Cotswald transfers cash of $10,000, accounts receivable of $54,000, supplies worth $5,000, and equipment worth $28,000 to the partnership. The partnership expects to collect $48,000 of the accounts receivable. Prepare a classified balance sheet for the partnership after the partner's investments on December 31, 2020. (List current assets in order of liquidity. List Property, Plant and Equipment in order of Land, Buildings and Equipment.) THE ABC PARTNERSHIP Balance Sheet Assets

Explanation / Answer

THE ABC PARTNERSHIP Balance Sheet Dec 31, 2020 Assets Current Assets Cash      50,000.00 Accounts Receivable       54,000.00 Allowance for Doubtful Debts       (6,000.00)      48,000.00 Supplies        5,000.00 Total Current Assets    103,000.00 Property, Plant & Equipment Equipment      66,000.00 Land      27,000.00 Building    112,000.00 Total Property, Plant & Equipment    205,000.00 Total Assets    308,000.00 Liabilities & Owners' Equity Liabilities Long Term Liabilities Mortgage Payable      40,000.00 Total Liabilities      40,000.00 Owners' Equity Actor's Capital      78,000.00 Brees's Capital      99,000.00 Cotswald's Capital      91,000.00 Total Owners' Equity    268,000.00 Total Liabilities & Owners' Equity    308,000.00 Actor Brees Cotswaid Total Cash    40,000.00    10,000.00      50,000.00 Accounts Receivable    54,000.00      54,000.00 Allowance for Doubtful Debts    (6,000.00)      (6,000.00) Supplies      5,000.00        5,000.00 Equipment    38,000.00    28,000.00      66,000.00 Land      27,000.00      27,000.00 Building    112,000.00    112,000.00                     -                       -   Long Term Mortgage Payable    (40,000.00)    (40,000.00) Total    78,000.00      99,000.00    91,000.00    268,000.00

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