Gwen Delk and Alliesha Johnson decide to form a partnership by combining the ass

Question

Gwen Delk and Alliesha Johnson decide to form a partnership by combining the assets of their separate businesses. Delk contributes the following assets to the partnership: cash, $19,880; accounts receivable with a face amount of $208,740 and an allowance for doubtful accounts of $7,530; merchandise inventory with a cost of $81,830; and equipment with a cost of $135,900 and accumulated depreciation of $88,340. The partners agree that $9,180 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $15,660 is a reasonable allowance for the uncollectibility of the remaining accounts, that the merchandise inventory is to be recorded at the current market price of $76,920, and that the equipment is to be valued at $59,930.

Journalize the partnership's entry to record Delk's investment. For a compound transaction, if an amount box does not require an entry, leave it blank.

Explanation / Answer

Journal Entry Date Particulars Dr. Amt Cr. Amt Cash                                                                  Dr.            19,880 Accounts Receivables                               Dr.          199,560 Merchandise Inventory                            Dr.            76,920 Equipment                                                     Dr.            59,930 To Allowance for Doubtful Account            15,660 To Delk Capital Account          340,630

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