problem15-17

The DELS partnership was formed by combining individual accounting practices on May 10, 20X1. The initial investments were as follows: Current Value Tax Basis Delaney: Cash $ 8,600 $ 8,600 Building 62,000 32,900 Mortgage payable, assumed by DELS 36,100 36,100 Engstrom: Cash 9,600 9,600 Office furniture 23,500 17,900 Note payable, assumed by DELS 11,500 11,500 Lahey: Cash 12,200 12,200 Computers and printers 18,600 21,100 Note payable, assumed by DELS 15,200 15,200 Simon: Cash 22,700 22,700 Library (books and periodicals) 7,900 5,900 Required: a. Prepare the journal entry to record the initial investments using GAAP accounting.

• Record the initial investments in DELS partnership.

Note: Enter debits before credits.

Event	General Journal	Debit	Credit
1

b. Calculate the tax basis of each partners capital if Delaney, Engstrom, Lahey, and Simon agree to assume equal amounts for the payables.