Partners original investment

Instructions

Hannah Freeman and Hugo Hernandez form a partnership

An unincorporated business form consisting of two or more persons conducting business as co-owners for profit.

by combining assets of their former businesses. The following balance sheet information is provided by Freeman, sole proprietorship:

Question not attempted.

Hannah Freeman Proprietorship

Balance Sheet

June 1, 20Y3

1	Cash		$81,700.00
2	Accounts receivable	$140,610.00
3	Less: Allowance for doubtful accounts	7,400.00	133,210.00
4	Land		225,360.00
5	Equipment	$79,690.00
6	Less: Accumulated depreciation-equipment	44,180.00	35,510.00
7	Total assets		$475,780.00
8
9	Accounts payable		$24,590.00
10	Notes payable		84,020.00
11	Hannah Freeman, capital		367,170.00
12	Total liabilities and owners equity		$475,780.00

Freeman obtained appraised values for the land and equipment as follows:

Land	$293,250
Equipment	31,665

An analysis of the accounts receivable indicated that the allowance for doubtful accounts should be increased to $9,210.

On December 31, journalize the partnerships entry for Freemans investment. Refer to the Chart of Accounts for exact wording of account titles.

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Chart of Accounts

CHART OF ACCOUNTS

Hannah Freeman and Hugo Hernandez

General Ledger

	ASSETS
110	Cash
111	Petty Cash
112	Accounts Receivable
113	Allowance for Doubtful Accounts
114	Interest Receivable
115	Notes Receivable
116	Inventory
117	Office Supplies
118	Store Supplies
119	Prepaid Insurance
120	Land
123	Equipment
124	Accumulated Depreciation-Equipment
129	Asset Revaluations
133	Patent

	LIABILITIES
210	Accounts Payable
211	Salaries Payable
213	Sales Tax Payable
214	Interest Payable
215	Notes Payable

	EQUITY
310	Hannah Freeman, Capital
311	Hannah Freeman, Drawing
312	Hugo Hernandez, Capital
313	Hugo Hernandez, Drawing

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Salaries Expense
521	Advertising Expense
522	Depreciation Expense-Equipment
523	Delivery Expense
524	Repairs Expense
529	Selling Expenses
531	Rent Expense
533	Insurance Expense
534	Office Supplies Expense
535	Store Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense
710	Interest Expense

Journal

On December 31, journalize the partnerships entry for Freemans investment. Refer to the Chart of Accounts for exact wording of account titles.