Module $5$ Solution:

onway and Lawrence form a partnership by combining the assets and liabilities of their respective sole proprietorships. The following are the assets and iabilities of each partner and their market values.

Requirements:

$1$ Journalize the formation of the partnership.

Half way through the first year of operations Conway and Lawrence admit Korman to the partnership. Korman purchases his share of the partnership for $\backslash (\backslash$$ $26,000\backslash )$ in cash and recieves $\backslash (\backslash$$ $26,000\backslash )$ in equity.

$2$ Journalize Korman's admission to the partnership.

The net income for the first vear of oprations was $\backslash (\backslash$$ $50,000\backslash ).$ After giving Conway a salary of $\backslash (\backslash$$ $20,000\backslash ),$ the rest of the net income is split evenly among the partners.

$3$ Prepare an income distribution worksheet.

The net income for the first year of oprations was $\backslash (\backslash$$ $50,000\backslash ).$ After giving Conway a salary of $\backslash (\backslash$$ $20,000\backslash ),$ the rest of the net income is split evenly among the partners.

$3$

Prepare an income distribution worksheet.

$4$

Journalize the closing of the income summary accounts to the capital

accounts.

After $5$ years of operation Conway, Korman, and Lawrence decide to dissolve their partnership and decide to incorporate. The following are the account balances before liquidation begins:

Complete the liquidating worksheet. Pate

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$82$

After $5$ years of operation Conway, Korman, and Lawrence decide to dissolve their partnership and decide to incorporate. The following are the account balances before liquidation begins:

$\backslash$begin$\{$tabular$\}\{|$l$|$r$|$r$|\}$

$\backslash$hline Cash & $127,000$ & $\backslash \backslash$

$\backslash$hline Equipment & $20,000$ & $\backslash \backslash$

$\backslash$hline Note Payable & & $6,000\backslash \backslash$

$\backslash$hline Capital, Conway & & $65,000\backslash \backslash$

$\backslash$hline Capital,Korman & & $40,000\backslash \backslash$

$\backslash$hline Capital, Lawrence & & $36,000\backslash \backslash$

$\backslash$hline $\backslash$hline

$\backslash$end$\{$tabular$\}$

$5$ Complete the liquidating worksheet.

$6$

Journalize each step of the closing.

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$c$|\}\{$ Journal $\}\backslash \backslash$

$\backslash$hline $\backslash$hline Accounts & Debit & Credit $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$

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