Jason Taylor operates a store that sells computer software. Taylor has agreed to enter into a partnership

Question:

Jason Taylor operates a store that sells computer software. Taylor has agreed to enter into a partnership with Omar Poole, effective January 1, 2016. The new firm will be called Global Computing. Taylor is to transfer all assets and liabilities of his firm to the partnership at the values agreed on. Poole will invest cash that is equal to 75 percent of Taylor's investment after revaluation. The accounts shown on Taylor's books and the agreed-on value of assets and liabilities are shown below.
Instructions
1. Prepare the general journal entries to record the following transactions in the books of the partnership on January 1, 2016:
Jason Taylor operates a store that sells computer software. Taylor

a. Receipt of Taylor's investment of assets and liabilities.
b. Receipt of Poole's investment of cash.
2. Prepare a balance sheet for the partnership as of the beginning of its operations on January 1, 2016.
Analyze: Based on the balance sheet you have prepared, what percentage (to the nearest 1/10 of 1%) of total equity is owned by Jason Taylor?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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...
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College Accounting Chapters 1-30

ISBN: 978-0077862398

14th edition

Authors: John Price, M. David Haddock, Michael Farina

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