Question
Charlie and Zoe form a partnership on 1 July 2020. Charlie agrees to bring in $100,000 of cash and inventory with a market value of
Charlie and Zoe form a partnership on 1 July 2020. Charlie agrees to bring in $100,000 of cash and inventory with a market value of $73 000.
Zoe, who has been trading as a sole trader, is to invest certain business assets at agreed market valuations and also transfer his business liabilities. Details of her assets and liabilities and their agreed valuations, are as follows:
| Book value in Zoe's records | Agreed market value | |
| Cash | $34 000 | $34 000 |
| Inventory | $60 000 | $66 000 |
| Equipment | $50 000 | $56 000 |
| Accounts receivable | $60 000 | $50 000 |
Prepare the appropriate journal entries to set up the partnership on 1 July 2020.
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Fundamental accounting principle
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
21st edition
1259119831, 9781259311703, 978-1259119835, 1259311708, 978-0078025587
