Vanessa Kaiser and Mariah Newman decide to form a partnership by


Vanessa Kaiser and Mariah Newman decide to form a partnership by combining the assets of their separate businesses. Kaiser contributes the following assets to the partnership: cash, $24,560; accounts receivable with a face amount of $161,390 and an allowance for doubtful accounts of $4,490; merchandise inventory with a cost of $84,060; and equipment with a cost of $137,580 and accumulated depreciation of $45,680.

The partners agree that $6,080 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $4,680 is a reasonable allowance for the uncollectibility of the remaining accounts, that the merchandise inventory is to be recorded at the current market price of $99,950, and that the equipment is to be valued at $89,040.


CHART OF ACCOUNTSKaiser and Mariah NewmanGeneral Ledger

111Petty Cash
112Accounts Receivable
113Allowance for Doubtful Accounts
114Interest Receivable
115Notes Receivable
116Merchandise Inventory
117Office Supplies
118Store Supplies
119Prepaid Insurance
124Accumulated Depreciation-Equipment
129Asset Revaluations
210Accounts Payable
211Salaries Payable
213Sales Tax Payable
214Interest Payable
215Notes Payable
310Vanessa Kaiser, Capital
311Vanessa Kaiser, Drawing
312Mariah Newman, Capital
313Mariah Newman, Drawing
610Interest Revenue
510Cost of Merchandise Sold
520Salaries Expense
521Advertising Expense
522Depreciation Expense-Equipment
523Delivery Expense
524Repairs Expense
529Selling Expenses
531Rent Expense
533Insurance Expense
534Office Supplies Expense
535Store Supplies Expense
536Credit Card Expense
537Cash Short and Over
538Bad Debt Expense
539Miscellaneous Expense
710Interest Expense

On December 1, journalize the partnership’s entry to record Kaiser’s investment. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.





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