1. Partnership Accounting:

On January 1, 2019, the partnership W & L was formed by Washington and Lincoln. They both had previous businesss, and are contributing the assets and liabilities of their old business which are reflected on the old respective books as follows:

(Note : Amounts in ( ) are credit balances)

Washingtons books Lincolns books

Cash $ 20,000.00 $ 40,000.00

Accounts Receivable 52,000.00 20,000.00

Allowance for Doubtful

Accounts (4,000.00) (3,000.00)

Equipment 20,000.00 10,000.00

Accumulated Depreciation (5,000.00) (3,000.00)

Accounts payable (30,000.00) (10,000.00)

Washington, Capital (53,000.00)

Lincoln, Capital (54,000.00)

The partners agree that the Accounts Receivable and the Equipment should be valued at $ 50,000.00 and $ 17,000.00 for Washington and $ 16,000.00 and

$ 6,000.00 for Lincoln, respectively.

1. Prepare the entry in journal form necessary to record the original investments of Washington and Lincoln to the partnership.

2. The partnership agreement of W&L states that Washington and Lincoln are to receive salaries allowance of $ 20,000.00 and $ 24,000.00, respectively; that Lincoln is to receive 6% interest on his beginning of the year capital balance. The remainder are to be shared in the ratio of 3:2.