1. Lisa Holler and Chaim Ehrlich operate separate jewelry stores. On January 1, 2020, they decide...
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1. Lisa Holler and Chaim Ehrlich operate separate jewelry stores. On January 1, 2020, they decide to combine their separate businesses which were operated as proprietorships to form L & C Jewels, a partnership. Information from their separate balance sheets is presented below: Lisa Holler Chaim Ehrlich Cash $10,000 $14,000 Accounts receivable 12,000 10,000 Allowance for doubtful accounts 1,000 500 Inventory 10,000 Accounts payable 6,000 Equipment 15,000 34,000 Accumulated depreciation-equipment 4,000 2,000 It is agreed that the expected realizable value of Lisa's accounts receivable is $9,000 and Chaim's receivables is $7,000. The fair value of Lisa's equipment is $18,000 and the value of Chaim's equipment is $21,000. The fair value of Lisa's inventory is $8,000. It is further agreed that the new partnership will assume all liabilities of the proprietorships. Instructions Prepare the journal entries necessary to record the formation of the partnership. Make a separate journal entry for each partner. 1. Lisa Holler and Chaim Ehrlich operate separate jewelry stores. On January 1, 2020, they decide to combine their separate businesses which were operated as proprietorships to form L & C Jewels, a partnership. Information from their separate balance sheets is presented below: Lisa Holler Chaim Ehrlich Cash $10,000 $14,000 Accounts receivable 12,000 10,000 Allowance for doubtful accounts 1,000 500 Inventory 10,000 Accounts payable 6,000 Equipment 15,000 34,000 Accumulated depreciation-equipment 4,000 2,000 It is agreed that the expected realizable value of Lisa's accounts receivable is $9,000 and Chaim's receivables is $7,000. The fair value of Lisa's equipment is $18,000 and the value of Chaim's equipment is $21,000. The fair value of Lisa's inventory is $8,000. It is further agreed that the new partnership will assume all liabilities of the proprietorships. Instructions Prepare the journal entries necessary to record the formation of the partnership. Make a separate journal entry for each partner.
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Journal Entries Particulars Debit Credit Lisa Holler Cash Ac 10000 Accounts Receivable Ac ... View the full answer
Related Book For
College Accounting Chapters 1-30
ISBN: 978-1259631115
15th edition
Authors: John Price, M. David Haddock, Michael Farina
Posted Date:
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