Question
Sahir and Adira decide on a partnership structure for their new business and the partnership is formed on 1 November 2019. Sahir contributes cash of
Sahir and Adira decide on a partnership structure for their new business and the partnership is formed on 1 November 2019. Sahir contributes cash of $23,000 and inventory with a market value of $97,000 to the partnership.
Adira, who had previously been operating as a sole trader, contributes assets and liabilities to the partnership at agreed market valuations as shown below:
| Book value in Adira's Records | Agreed Market Value | |
| Cash | $27,000 | $27,000 |
| Inventory | $76,000 | $81,000 |
| Equipment | $49,000 | $43,000 |
| Accounts Payable | $36,000 | $36,000 |
Prepare the appropriate General Journal entries to set up the partnership on 1 November 2019.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Accounting for Governmental and Nonprofit Entities
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely
18th edition
1260190080, 1260190083, 978-1259917059
