1.

Ed and Frank form a partnership by combining the assets of their separate business. Ed contributes accounts receivable with a face amount of $50,000 and equipment with a cost of $180,000 and accumulated depreciation of $100,000. The partners agree that the equipment price is to be priced at $70,000, that $2,500 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $1,500 is reasonable allowance for the un-collectability of the remaining accounts receivable. Frank contributes cash of $20,000 and merchandise inventory of $49,500. The partners agree that the merchandise inventory is to be priced at $51,000.

Journalize the entries to record in the partnership accounts (a) Eds investment and (b) Franks investment

2.

After discontinuing the ordinary business operations and closing the accounts if May 7, the ledger id the partnership of A, B, and C indicated the following:

Cash $ 7,500

Noncash Assets 105,000

Liabilities $ 27,500

A, Capital 45,000

B, Capital 15,000

C, Capital 25,000

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$112,500 $112,500

The partners share net income and losses in the ration of 3:2:1. Between May 7-30, the noncash assets were sold for $120,000, the liabilities were paid, and the remaining cash was distributed to the partners. (a) Prepare a statement of partnership liquidation.

(b) Assume the same facts as in (a) except that the noncash assets were sold for $45,000 and any partner with a capital deficiency pays the amount of the deficiency to the partnership. Prepare a statement of partnership liquidation.