Jackson and Richard formed a partnership on 1 July 2025, agreeing to share profits and losses in
Question:
Jackson and Richard formed a partnership on 1 July 2025, agreeing to share profits and losses in the ratio of 2:1. Jackson contributed \($30\) 000 in cash and land with a fair value of \($180\) 000. Assets contributed to and liabilities assumed by the partnership from Richard’s business at both carrying amount and fair value are shown below.
During the first year, Jackson contributed an additional \($12\) 000 in cash. The partnership’s profit was \($56\) 000. Jackson withdrew \($8000\) and Richard withdrew \($16\) 000 in expectation of profits (ignore GST).
Required
(a) Prepare the journal entries to record each partner’s initial investment.
(b) Prepare the partnership’s balance sheet as at 1 July 2025.
(c) Prepare a statement of changes in partners’ equity for the year ended 30 June 2026, using method 2 for recording partners’ equity accounts.
Step by Step Answer:
Accounting
ISBN: 9780730382737
11th Edition
Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie