Answered step by step
Verified Expert Solution
Question
1 Approved Answer
4 You are forming a partnership with a close friend. Following is a list of financial items that you and friend are adding to the
4 You are forming a partnership with a close friend. Following is a list of financial items that you and friend are adding to the partnership Book Values You Friend Cash $15,000 $17,000 Accounts Receivable $9,000 $7,500 Allowance for Doubtful Accounts $800 $600 Inventory $18,000 $16,000 Equipment $37,500 $43,200 Accumulated Depreciation $12,500 $13,200 Accounts Payable $14,000 $15,500 Cash Accounts Receivable Allowance for Doubtful Accounts Inventory Equipment Accumulated Depreciation Accounts Payable Market Values You Friend $15,000 $17,000 $8,000 $7,500 $900 $900 $16,500 $15,000 $32,000 $28,000 $14,000 $13,500 Required: 1 Record the journal entry to prepare the formation of the partnership. 2 The market value for account receivable, inventory and equipment are different from the book value. Give one example why the market value vs the book value changed for each of the three assets
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started