Junal entry to record this transaction. Mr. Meekes, Mr. Kadeem, and Ms. Roberts

Question

Junal entry to record this transaction. Mr. Meekes, Mr. Kadeem, and Ms. Roberts agreed to form the Engineering Redesign Partnership. Mr. Meekes agreed to contribute $90,000 cash to the partnership. Mr. Kadeem contributes equipment valued at $5,000 and a building with a fair value of $102,000. Ms. Roberts transfers to the partnership cash of $7,000, accounts receivable of $60,000 and equipment worth $30,000. The partnership expects to collect $55,000 of the accounts receivable. Instructions (a) Prepare the journal entries to record each partner's contribution (b) Calculate the total owners' equity amount upon formation of the partnership. The partners of ABCO Carpet Cleaning Services have the following beginning capital balances AB, $80,000 and Co, $120,000. During 2017 the partnership earned net income of $140,00o. During the year AB withdrew $40,000 and CO made drawings of $27,000. Instructions (a) Assume the partnership income-sharing agreement calls for income to be divided with a salary of $45,000 to AB and $25,000 to co, interest of 15% on beginning capital of each partner, a bonus of 25% on income over $100,000 is to be paid to AB. The remainder is divided 50%-50%. Prepare the journal entry to record the allocation of net income. (b) Compute the partners' ending capital balances under the assumption in (a) above

Explanation / Answer

Second question:

b.

Fair value of assets: Particulars Meekes capital Kadeem capital Roberts capital Total Cash                     90,000                        7,000            97,000 Equipment                        4,000                     30,000            34,000 Buidling                  1,02,000        1,02,000 Accounts receivable                     55,000            55,000 Total capital/equity                     90,000                  1,06,000                     92,000        2,88,000 Entry: Account Debit Credit Cash                     97,000 Equipment                     34,000 Buidling                  1,02,000 Accounts receivable                     55,000 Meekes capital                     90,000 Kadeem capital                  1,06,000 Roberts capital                     92,000 [Partnership formed]

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