On October 1, 20Y8, Jacinto Suarez and Tricia Fritz form a partnership. Suarez agrees to invest...
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On October 1, 20Y8, Jacinto Suarez and Tricia Fritz form a partnership. Suarez agrees to invest $20,890 in cash and inventory valued at $56,320. Fritz invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring Fritz's total capital to $59,510. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Fritz's Ledger Agreed-Upon Balance Valuation Accounts Receivable $19,150 $18,230 Allowance for Doubtful Accounts 1,140 1,500 Equipment 83,410 55,190 Accumulated Depreciation-Equipment 29,490 Accounts Payable 14,740 14,740 Notes Payable (current) 35,850 35,850 The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $22,150 (Suarez) and $30,150 (Fritz), and the remainder equally. Required: 1. Journalize the entries to record the investments of Suarez and Fritz in the partnership accounts. 2. Prepare a balance sheet as of October 1, 20Y8, the date of formation of the partnership of Suarez and Fritz. 3. After adjustments at September 30, 20Y9, the end of the first full year of operations, the revenues were $295,870 and expenses were $205,400, for a net income of $90,470. The drawing accounts have debit balances of $27,820 (Suarez) and $30,550 (Fritz). Journalize the entries to close the revenues and expenses and the drawing accounts at September 30, 20Y9. On October 1, 20Y8, Jacinto Suarez and Tricia Fritz form a partnership. Suarez agrees to invest $20,890 in cash and inventory valued at $56,320. Fritz invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring Fritz's total capital to $59,510. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Fritz's Ledger Agreed-Upon Balance Valuation Accounts Receivable $19,150 $18,230 Allowance for Doubtful Accounts 1,140 1,500 Equipment 83,410 55,190 Accumulated Depreciation-Equipment 29,490 Accounts Payable 14,740 14,740 Notes Payable (current) 35,850 35,850 The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $22,150 (Suarez) and $30,150 (Fritz), and the remainder equally. Required: 1. Journalize the entries to record the investments of Suarez and Fritz in the partnership accounts. 2. Prepare a balance sheet as of October 1, 20Y8, the date of formation of the partnership of Suarez and Fritz. 3. After adjustments at September 30, 20Y9, the end of the first full year of operations, the revenues were $295,870 and expenses were $205,400, for a net income of $90,470. The drawing accounts have debit balances of $27,820 (Suarez) and $30,550 (Fritz). Journalize the entries to close the revenues and expenses and the drawing accounts at September 30, 20Y9.
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1 Journal Entries to Record Investments a Jacinto Suarezs Investment Cash 20890 Inventory 56320 Capi... View the full answer
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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