Dennis Devlin, Gary Freemont, and Jean London started a partnership to operate a management consulting business. The

Question:

Dennis Devlin, Gary Freemont, and Jean London started a partnership to operate a management consulting business. The partnership (DFL Partners) had the following transactions:

2012 Jan. 2 Devlin, Freemont, and London formed the partnership by signing an agreement that stated that all profits would be shared in a 3:2:5 ratios and by making the following investments:

_________________________________Devlin Freemont London

Cash ...................................................... $ 24,000......$ 42,000......$138,000

Accounts receivable (net) .........................84,000.......126,000........180,000

Office furniture .................................................0.........66,000................0

Computer equipment ..............................156,000...............0.........54,000

Dec. 31 The partnership reported net income of $252,000 for the year.

2013 Jun. 7 Devlin and London agreed that Freemont could sell his share of the partnership to André Hughes for $390,000. The new partners agreed to keep the same profit-sharing arrangement (3:2:5 for Devlin: Hughes: London).

Dec. 31 The partnership reported a net loss of $300,000 for the year.

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

Cash ................................................................................................ $ 78,000

Accounts receivable .......................................................................1,476,000

Allowance for uncollectible accounts................................................ 72,000

Office furniture ................................................................................360,000

Computer equipment ........................................................................600,000

Accumulated amortization (total) ....................................................180,000

Accounts payable ......................................................................... 1,440,000

The assets were sold for the following amounts:

Accounts receivable ......................................................................$ 720,000

Office furniture ................................................................................390,000

Computer equipment .......................................................................360,000

Devlin and Hughes both have personal assets, but London does not.

Required

Journalize all 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...