exercise 12-3

Exercise 12-3 Journalizing partnership transactions Check S79.250 Exercise 12-4 Journalizing partnership formation a. Sharif. Henry and Korb are recent college developtnenl company. They all have college debts and currently do not own any equipment needed to get the company startec[ b. Dr. Ward and Dr. Liu are recent graduates from medical residency programs. Both are family practice physicians and would like open a clinic in an underserved rural area. Although neither has any funds to bring to the new venture. an investor has expressed interest in making a loan to provide starl- up funds for their practice. c. Munson has been out of school for about five years and has become quite knowledgeable about the resi- dential real estate market. He would like to organize a company that buys and sells real estate. Munson believes he has the eMu1ise to manage the company but needs funds to invest in residential property. On March l. 2013, Eckert and Kelley formed a partnership. Ecken contributed *2.500 cesh and Kelley contributed land valued at $60,000 and a building valued at S 100.000. The partnership also assumed responsibility for Kelley's $92,500 long-term note payable associated With the land and building. The partners agreed to share income as follows: Eckert is to receive an annual salary allowance of S2S.000. both are to receive an annual interest allowance of 10% of their heginning-year capital investment. and any remaining income or loss is to be shared equally. On October 20, 201 3, Eckert withdrew S34.OOO cash and Kelley withdrew cash. After the adjusting and closing entries are made to the revenue and expense accounts at December 31, 201 3, the Income Summary account had a credii balance of 90.000. I. Prepare journal entries to record (a) the partners' initial capital investments. (bi their cash withdraw- als, and (c) the December 3 1 closing of both the Withdrawals and Income Summary accounts. 2. Determine the balances of the partners' capital accounts as of December 31.2013. Angela Moss and Autumn Barber organize a partnership on January l. Moss's initial net investment consisting of cash ($17,500). equipment (S82.500). and a note payable reflecting a bank Loa' for the new business ($25,000). Barber's initial investment is cash of S31 ,250. These amounts are values agreed on by both partners. Prepare journal entries to record (l) Moss's investment and (2) Barbe