The partnership of Jordan and O'Neal began business on January 1, 20X7. Each partner contributed the following assets (the noncash assets are stated at their fair values on January 1, 20X7) Jordan $ 61,500 80,800 O' Neal Cash $ 51,000 Inventories -0- Land -0- 131,100 Equipment 100,200 -0- The land was subject to a $50,400 mortgage, which the partnership assumed on January 1, 20X7. The equipment was subject to an installment note payable that had an unpaid principal amount of $21,600 on January 1, 20X7. The partnership also assumed this note payable. Jordan and O'Neal agreed to share partnership income and losses in the following manner Jordan O' Neal Interest on beginning capital 3% 38 balances Salaries $12,500 $12,500 Remainder 60% 40% During 20X7, the following events occurred: 1. Inventory was acquired at a cost of $30,400. At December 31, 20X7, the partnership owed $7,400 to its suppliers. 2. Principal of $6,100 was paid on the mortgage. Interest expense incurred on the mortgage was $2,300, all of which was paid by December 31, 20x7. 3. Principal of $4,000 was paid on the installment note. Interest expense incurred on the installment note paid by December 31, 20X7. 4. Sales on account amounted to $162,000. At December 31, 20x7, customers owed the partnership $22,200. 5. Selling and general expenses, excluding depreciation, amounted to $34,400. At December 31, 20X7, the partnership owed $6,500 of accrued expenses. Depreciation expense was $6,600. 6. Each partner withdrew $240 each week in anticipation of partnership profits. 7. The partnership's inventory at December 31, 20X7, was $20,900. 8. The partners allocated the net income for 20X7 and closed the accounts. was $1,800, all of which was Additional Information On January 1, 20X8, the partnership decided to admit Hill to the partnership, On that date, Hill invested $97,760 of cash into the partnership for a 20 percent capital interest. Total partnership capital after Hill was admitted totaled $452,000. Required: a. Prepare journal entries to record the formation of the partnership on January 1, 20X7, and to record the events that occurred during 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round the fina answers to nearest doller amount.) Answer is complete and correct. Transaction No General Journal Debit Credit Cash 112,500 Inventory 80.800 Land 131.100 Equipment 100,200 Mortgage payable Installment note payable 50,400 21,600 Jordan, Capital 220.900 O'Neal, Capital 131,700 Answer is complete but not entirely correct. No Event General Journal Debit Credit A 01 Inventory 30,400 Cash 23,000 Accounts payable 7,400 B 02 Mortgage payable 6,100 Interest expense 2,300 Cash 8,400 03 Installment note payable 4,000 Interest expense 1,800 Cash 5,800 04 Accounts receivable 22,200 Cash 139,800 Sales 162,000 E (a)05 Selling and general expenses 34,400 Cash 27,900 Accrued expenses payable 6,500 (b)05 Depreciation expense 6.600 Accumulated depreciation 6,600 06 Jordan, Drawing O Neal, Drawing 12.480 12,480O Cash 24.960 w a terusen ww O'Neal, Drawing 12,480 Cash 24,960 Sales 07 H 162,000 Income summary 162,000 (a)08 Cost of goods sold 90,300 Inventory 90,300 J (b)08 Income summary 135,400 Cost of goods sold 90,300 Selling and general expenses 34,400 Depreciation expense 6,600 Interest expense 4,100 K Income summary (cj08 26,600 Jordan, Capital 15,960 ) O'Neal, Capital 10,640 L Jordan, Capital (d)o8 12.480 O'Neal, Capital 12.480 Jordan, Drawing 12.480 ONeal, Drawing 12,480 6 b. Prepare the income statement for the Jordan-O'Neal Partnership for the year ended December 31, 20X7 Answer is complete and correct. JORDAN-O'NEAL PARTNERSHIP Income Statement For the Year Ended December 31, 20X7 S 162,000 Sales Less: Cost of Goods Sold Inventory, January 1 80,800 Purchases 30,400 Goods Available fo $ 111,200 le Less: Inventory, December 31 20,900 90,300 Gross Profit 71,700 S Less Selling and general expenses 34,400 Less: Depreciation expense 6,600 (41,000) Operating income Nonoperating expense-Interest Net Income 30,700 4,100 26,600 c. Prepare a balance sheet for the Jordon-O'Neal Partnership at December 31, 20X7. (Round the final answers to nearest dollar amount.) X Answer is not complete. JORDAN-O'NEAL PARTNERSHIP Balance Sheet At December 31, 20X7 Assets Total Assets 0 Liabilities and Capital Liabilities Total liabilities Capital Total capital Total Liabiliies and Capital d. Prepare the journal entry for the admission of Hill on January 1, 20x8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No Event General Journal Debit Credit