Question

Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $48,000 and equipment with a cost of $178,000 and accumulated depreciation of $99,000. The partners agree that the equipment is to be valued at $68,500, that $4,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,100 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $22,000 and merchandise inventory of $45,500. The partners agree that the merchandise inventory is to be valued at $49,000. Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. If an amount box does not require an entry, leave it blank. (a) Accounts Receivable 45,900 178,000 Equipment Allowance for Doubtful Accounts Jesse, Capital (b) Cash Merchandise Inventory Tim, Capital

Answer 1

Answers

	Accounts title	Debit	Credit
[a]	Accounts receivables [48000 - 4000]	$44,000
	Equipment [fair value]	$68,500
	Allowance for doubtful accounts		$2,100
	Jesse, Capital		$110,400
[b]	Cash	$22,000
	Merchandise Inventory	$49,000
	Tim, Capital		$71,000