1. Alfredo and Befoe decide to form a partnership. From their own businesses or personal assets they contribute the following assets which are shown at book value

A contributes: BALANCE SHEET of Mr. A before forming Partnership

Cash $13,000 A-Pay $20,000

A-Rec $17,500 N-Pay 20,000

Allowance-Doubtful Accounts - 3,000 14,500

Inventory 26,000

Equipment 45,000

Acc-Depreciation - 24,000 21,000 A. Capital 35,000

Total Assets $75,000 Total Liability + Equity $75,000

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B. contributes BALANCE SHEET of Mr. B before forming Partnership

Cash $16,000 A-Pay $2,000

Office supplies 5,000

------------------------------------------------------------------------------------------------------------------------- B. Capital 19,000

Total assets $21,000 Total liability + equity $21,000

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a. A's and B's agree that the FMV of the store equipment is $25,000, inventory is $28,000, net receivables is $13,000, and B's office supplies is $3,000

(1) Record separate entries for each partner using the above data. Start a new set of books.

(2) Prepare a balance sheet for the partnership after the above entries are made.

(3) What would A's entry be if they agreed $10,000 goodwill related to A's business?

b. Re-do (1) but use Abe's existing books for the partnership.