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
|113||Allowance for Doubtful Accounts|
|213||Sales Tax Payable|
|310||Vanessa Kaiser, Capital|
|311||Vanessa Kaiser, Drawing|
|312||Mariah Newman, Capital|
|313||Mariah Newman, Drawing|
|510||Cost of Merchandise Sold|
|534||Office Supplies Expense|
|535||Store Supplies Expense|
|536||Credit Card Expense|
|537||Cash Short and Over|
|538||Bad Debt 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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