William Dione, Julie Porter, and Regina Westlake started a partnership to operate a courier service. The partnership

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William Dione, Julie Porter, and Regina Westlake started a partnership to operate a courier service. The partnership (DP&W Couriers) had the following transactions:

2012 Jan. 2 Dione, Porter, and Westlake formed the partnership by signing an agreement that stated that all profits would be shared in a 2:3:5 ratio and by making the following investments:

                _________________________________________Dione            Porter        Westlake

Cash ....................................................................... $12,000...........$ 8,000...........$14,000

Accounts receivable (net) .........................................20,000............14,500............60,000

Office furniture (net) .........................................................0..................0............15,000

Vehicles (net) ............................................................21,000............38,500...................0

Dec. 31 The partnership reported net income of $53,500 for the year.

2013 Jun. 7 Dione and Westlake agreed that Porter could sell her share of the partnership to Ray Ewing for $82,500. The new partners agreed to keep the same profit-sharing arrangement (2:3:5 for Dione:Ewing:Westlake).

Dec. 31 The partnership reported a net loss of $67,000 for the year.

2014 Jan. 3 The partners agreed to liquidate the partnership. On this date, the balance sheet showed the following items (all accounts have their normal balances):

Cash .......................................................................................................... $ 17,500

Accounts receivable ................................................................................... 316,000

Allowance for uncollectible accounts.......................................................... 22,500

Office furniture ........................................................................................... 74,500

Vehicles ..................................................................................................... 240,000

Accumulated amortization (total) ............................................................... 49,500

Accounts payable....................................................................................... 386,500

The assets were sold for the following amounts:

Accounts receivable ................................................................................ $190,000

Office furniture ........................................................................................... 82,500

Vehicles .................................................................................................... 106,000

Dione and Ewing both have personal assets, but Westlake does not.

Required

Journalize all of the transactions for the partnership.

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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Related Book For  book-img-for-question

Accounting

ISBN: 978-0132690089

9th Canadian Edition volume 2

Authors: Charles T. Horngren, Walter T. Harrison Jr., Jo Ann L. Johnston, Carol A. Meissner, Peter R. Norwood

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