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 1 year ago

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