M12-1) Louie and Frankie formed a partnership on August 31. The partners agreed

ID: 2364503 • Letter: M

Question

M12-1) Louie and Frankie formed a partnership on August 31. The partners agreed to furnish an equal amount of capital. Frankie contributes no cash, but does contribute the following assets and liabilities from his sole proprietorship: Book Value Market Value Accounts Receivable $22,500 $22,500 Allowance for Doubtful Accounts (740) (1,360) Inventory 43,000 42,000 Prepaid Expenses 2,560 2,560 Store Equipment 36,700 26,600 Accumulated depreciation (9,200) (0) Accounts Payable (22,300) (22,300) On September 1, after Frankie

Explanation / Answer

Particulars

Book Value

Market Value

Accounts Receivable

22500

Allowance for Bad debts

-740

-1360

Inventory

43000

42000

Prepaid Expenses

2560

Store Equipment

36700

26600

Accumulated Depreciation

-9200

Accounts Payable

-22300

Total

72520

60800

1.Assets dr 60800, Frankie’s capital cr 60800

2.Cash dr 60800, Louie’s capital cr 60800

For part 3. Of the answer please re-post the question.

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