Entries and Balance Sheet for Partnership

On April $1,20$Y$1,$ Whitney Lang and Eli Capri form a partnership. Lang agrees to invest $$9,900$ cash and merchandise inventory valued at $$26,700.$ Capri invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring his total capital to $$66,000.$ 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 $$15,100$ $$12,200$

Allowance for Doubtful Accounts $700900$

Merchandise Inventory $17,60023,600$

Equipment $29,70028,800$

Accumulated Depreciation$$Equipment $9,900$

Accounts Payable $5,3005,300$

Notes Payable $($current$)3,3003,300$

The partnership agreement includes the following provisions regarding the division of net income: interest of $10\%$ on original investments, salary allowances of $$29,700($Lang$)$ and $$18,100($Capri$),$ 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 $1,20$Y$1,$ the date of formation of the partnership of Lang and Capri.

Lang and Capri

Balance Sheet

April $1,20$Y$1$

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 $31,20$Y$2,$ the end of the first full year of operations, the revenues were $$438,000$ and expenses were $$347,000,$ for a net income of $$91,000.$ The drawing accounts have debit balances of $$32,000($Lang$)$ and $$27,000($Capri$).$ Journalize the entries to close the revenues and expenses and the drawing accounts at March $31,20$Y$2.$ 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 $81$