Entries and Balance Sheet for Partnership

On April 1, 20Y1, Whitney Lang and Eli Capri form a partnership. Lang agrees to invest $11,800 cash and merchandise inventory valued at $31,900. Capri invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring his total capital to $79,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow:

	Capri's Ledger Balance		Agreed-Upon Balance
Accounts Receivable	$18,100		$14,700
Allowance for Doubtful Accounts	800		1,000
Merchandise Inventory	21,000		28,100
Equipment	35,400		34,300
Accumulated DepreciationEquipment	11,800
Accounts Payable	6,400		6,400
Notes Payable (current)	3,900		3,900

The partnership agreement includes the following provisions regarding the division of net income: interest of 10% on original investments, salary allowances of $35,400 (Lang) and $21,600 (Capri), and the remainder equally.

Required:

1. Journalize the entries to record the investments of Lang and Capri in the partnership accounts. If an amount box does not require an entry, leave it blank.

	ACCOUNT	DEBIT	CREDIT
Apr. 1		fill in the blank 2	fill in the blank 3
		fill in the blank 5	fill in the blank 6
		fill in the blank 8	fill in the blank 9
Apr. 1		fill in the blank 11	fill in the blank 12
		fill in the blank 14	fill in the blank 15
		fill in the blank 17	fill in the blank 18
		fill in the blank 20	fill in the blank 21
		fill in the blank 23	fill in the blank 24
		fill in the blank 26	fill in the blank 27
		fill in the blank 29	fill in the blank 30
		fill in the blank 32	fill in the blank 33

2. Prepare a balance sheet as of April 1, 20Y1, the date of formation of the partnership of Lang and Capri.

Lang and Capri Balance Sheet April 1, 20Y1
Assets
Current assets:
		fill in the blank 35
	fill in the blank 37
	fill in the blank 39	fill in the blank 40
		fill in the blank 42
Total current assets			$ fill in the blank 43
Property, plant, and equipment:
			fill in the blank 45
Total assets			$ fill in the blank 46
Liabilities
Current liabilities:
		$ fill in the blank 48
		fill in the blank 50
Total liabilities			$ fill in the blank 51
Partners' Equity
		$ fill in the blank 53
		fill in the blank 55
Total partners' equity			fill in the blank 56
Total liabilities and partners' equity			$ fill in the blank 57

3. After adjustments at March 31, 20Y2, the end of the first full year of operations, the revenues were $432,000 and expenses were $336,000, for a net income of $96,000. The drawing accounts have debit balances of $34,000 (Lang) and $29,000 (Capri). Journalize the entries to close the revenues and expenses and the drawing accounts at March 31, 20Y2. If an amount box does not require an entry, leave it blank.

	ACCOUNT	DEBIT	CREDIT
Mar. 31		fill in the blank 59	fill in the blank 60
		fill in the blank 62	fill in the blank 63
		fill in the blank 65	fill in the blank 66
		fill in the blank 68	fill in the blank 69
Mar. 31		fill in the blank 71	fill in the blank 72
		fill in the blank 74	fill in the blank 75
		fill in the blank 77	fill in the blank 78
		fill in the blank 80	fill in the blank 81