Aaron and Kim form a partnership by combining the assets of their separate busin

Question

Aaron and Kim form a partnership by combining the assets of their separate businesses. Aaron contributes accounts receivable with a face amount of $50,000 and equipment with a cost of $180,000 and accumulated depreciation of $100,000. The partners agree that the equipment is to be priced at $68,000, that $3,500 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,000 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Kim contributes cash of $21,000 and merchandise inventory of $44,500. The partners agree that the merchandise inventory is to be priced at $48,000.
-Journalize the entries to record in the partnership accounts (a) Aaron's investment and (b) Kim's investment. If an amount box does not require an entry, leave it blank or enter "0".

Explanation / Answer

Hi, Please find the entries as follows: A) Aaron's Investment: Accounts Receivables Dr. 46500 Equipment Dr. 68000 Allowance for Doubtful Debts Cr. 2000 Aaron Capital Cr. 112500 B) Kim's Investment Cash Dr. 21000 Merchandise Inventory Dr. 48000 Kim Capital Cr. 69000 Thanks.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.