Jack Herington has owned and operated a proprietorship for several years. On January 1, he decides to

Question:

Jack Herington has owned and operated a proprietorship for several years. On January 1, he decides to terminate this business and become a partner in the firm of Herington and Kaspar. Herington’s investment in the partnership consists of $12,000 in cash, and the following assets of the proprietorship: accounts receivable $14,000 less allowance for doubtful accounts of $2,000, and equipment $20,000 less accumulated depreciation of $4,000. It is agreed that the allowance for doubtful accounts should be $3,000 for the partnership. The fair market value of the equipment is $13,500.

Instructions

Journalize Herington’s admission to the firm of Kaspar and Herington.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...