Question

Instructions Chart of Accounts General Journal Instructions Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $45,000 and equipment with a cost of $185,000 and accumulated depreciation of $101,000. The partners agree that the equipment is to be valued at $67,900, that $3,900 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 uncolectibility of the remaining accounts receivable. Tim contributes cash of $20,500 and merchandise inventory of $45.500. The partners agree that the merchandise inventory is to be valued at $49,000. Required: Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment. Refer to the Chart of Accounts for exact wording of account titles

Answer 1

Journal

(a)	Accounts receivables	41,100
	Equipment	67,900
	Allowance for doubtful accounts		2,100
	Capital, Jesse		106,900
(b)	Cash	20,500
	Merchandise inventory	49,000
	Capital, Tim		69,500

a) Investment by Jesse = (Face value of Accounts receivables - Worthless receivables - Allowance for doubtful accounts) + Fair value of equipment

= (45,000 - 3,900 - 2,100) + 67,900

= $106,900

Kindly give a positive rating if you are satisfied with the answer. Feel free to ask if you have any doubt. Thanks.