1. On January 1, 19x1, Joyce Chan and Kim Nichols agreed to form a partnership to operate an educational consulting business. Chan and Nichols invested cash of $90,000 and $60,000, respectively, in the partnership. The business had normal first-year problems, but during the second year the operation was very successful. For 19x1, they reported a $30,000 loss; for 19x2, an $80,000 income.

a. Prepare the journal entry to record the investment of both partners in the partnership.

b. Determine Chan?s and Nichol?s share of the income and loss for each year, assuming each of the following methods of sharing income and losses: i. The partners agreed to share income and losses equally. ii. The partners agreed to share income and losses in the ratio of 7:3 for Chan and Nichols, respectively. iii. The partners agreed to share income according to their original capital investment ratio but did not mention losses.

2. Rhodes and Miller decide to form the R and M Partnership. On January 1, 19x6, they combine their assets with the following current market values and book values:

Journalize the entries on January 1, 19x6, to record the partners? initial investments.

3. Bingham, Davis, and Turner decide to liquidate their partnership. The articles of partnership specify a net income division ratio of 3:3:4, respectively. Immediately before liquidation, the partnership accounts have the following balances. (i.e. 3 : 3 : 4 = 30%, 30%, & 40%)

Cash	$25,000
Noncash assets	145,000
Liabilities	30,000
Bingham, capital	45,000
Davis, capital	40,000
Turner, capital	55,000

Prepare journal entries to sell the noncash assets for $160,000, pay the liabilities, and divide the remaining cash among the partners.

Answer rating: 100% (QA)

1 a CASH DR 90000 CAPITAL CHAN CR 90000 CASH DR 60000 CAPITAL NOCHOLS CR 60000 b i EACH PARTNER WILL ... View the full answer