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In: Accounting

Henri Mikels and Alex Jamison are watch repairmen who want to form a partnership and open...

Henri Mikels and Alex Jamison are watch repairmen who want to form a partnership and open a jewelry store. They have an attorney prepare their partnership
agreement, which indicates that assets invested in the partnership will be recorded at their fair market value and that liabilities will be assumed at book value. The assets contributed by each partner and the liabilities assumed by the partnership are as follows:

Assets Henri Mikels | Alex Jamison | Total
Cash $40,000 | $30,000 | $70,000
Accounts receivable 52,000 | 20,000 | 72,000
Allowance for uncollectible accounts 4,000 | 3,000 | 7,000
Supplies 1,000 | 500 | 1,500
Equipment 20,000 |10,000 | 30,000
Liabilities
Accounts payable 32,000 | 9,000 | 41,000

Prepare the entry in journal form necessary to record the original investments of Mikels and Jamison in the partnership.

Solutions

Expert Solution

Cash 70000
             Henri Mikels Capital 40000
             Alex Jamison Capital 30000
Accounts Receivable 72000
             Henri Mikels Capital 52000
             Alex Jamison Capital 20000
Bad Debt Expense 7000
             Allowance for uncollectible accounts 7000
Supplies 1500
             Henri Mikels Capital 1000
             Alex Jamison Capital 500
Equipment 30000
             Henri Mikels Capital 20000
             Alex Jamison Capital 10000
Henri Mikels Capital 32000
Alex Jamison Capital 9000
             Accounts Payable 41000

ekkarill92 answered 2 years ago
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