On June 1, 2020, Jill Bow and Aisha Adams formed a partnership to open a gluten-free...

 

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On June 1, 2020, Jill Bow and Aisha Adams formed a partnership to open a gluten-free commercial bakery, contributing $291,000 cash and $382,000 of equipment, respectively. The partnership also assumed responsibility for a $51,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $161.000, both are to receive an annual interest allowance of 5% of their original capital investments, and any remaining profit or loss is to be shared 40/60 (to Bow and Adams, respectively). On November 20, 2020, Adams withdrew cash of $111,000. At year-end, May 31, 2021, the Income Summary account had a credit balance of $490,000. On June 1, 2021, Peter Williams invested $131,000 and was admitted to the partnership for a 20% Interest in equity. Required: 1. Prepare journal entries for the following dates. a. June 1, 2020 View transaction list Journal entry worksheet < 1 Record the formation of partnership. Note: Enter debits before credits. Date June 01, 2020 Record entry b. November 20, 2020 View transaction list 1 Journal entry worksheet Note: Enter debits before credits. Date Nov 20, 2020 Record the withdrawal by partner. Record entry c. May 31, 2021 View transaction list Note: Enter debits before credits. Date May 31, 2021 Journal entry worksheet < Record entry Record the closing of profit to capital. d. June 1, 2021 View transaction list General Journal Clear entry Note: Enter debits before credits. Date June 01, 2021 General Journal Record entry Clear entry Journal entry worksheet Bow, capital Aisha Adams, capital Williams, capital Record the admission of Williams for a 20% interest. General Journal Clear entry General Journal Clear entry Debit Debit Debit Debit Credit View general journal Credit View general journal Credit View general journal Credit > View general journal > 2. Calculate the balance in each partner's capital account immediately after the June 1, 2021, entry. On June 1, 2020, Jill Bow and Aisha Adams formed a partnership to open a gluten-free commercial bakery, contributing $291,000 cash and $382,000 of equipment, respectively. The partnership also assumed responsibility for a $51,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $161.000, both are to receive an annual interest allowance of 5% of their original capital investments, and any remaining profit or loss is to be shared 40/60 (to Bow and Adams, respectively). On November 20, 2020, Adams withdrew cash of $111,000. At year-end, May 31, 2021, the Income Summary account had a credit balance of $490,000. On June 1, 2021, Peter Williams invested $131,000 and was admitted to the partnership for a 20% Interest in equity. Required: 1. Prepare journal entries for the following dates. a. June 1, 2020 View transaction list Journal entry worksheet < 1 Record the formation of partnership. Note: Enter debits before credits. Date June 01, 2020 Record entry b. November 20, 2020 View transaction list 1 Journal entry worksheet Note: Enter debits before credits. Date Nov 20, 2020 Record the withdrawal by partner. Record entry c. May 31, 2021 View transaction list Note: Enter debits before credits. Date May 31, 2021 Journal entry worksheet < Record entry Record the closing of profit to capital. d. June 1, 2021 View transaction list General Journal Clear entry Note: Enter debits before credits. Date June 01, 2021 General Journal Record entry Clear entry Journal entry worksheet Bow, capital Aisha Adams, capital Williams, capital Record the admission of Williams for a 20% interest. General Journal Clear entry General Journal Clear entry Debit Debit Debit Debit Credit View general journal Credit View general journal Credit View general journal Credit > View general journal > 2. Calculate the balance in each partner's capital account immediately after the June 1, 2021, entry. On June 1, 2020, Jill Bow and Aisha Adams formed a partnership to open a gluten-free commercial bakery, contributing $291,000 cash and $382,000 of equipment, respectively. The partnership also assumed responsibility for a $51,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $161.000, both are to receive an annual interest allowance of 5% of their original capital investments, and any remaining profit or loss is to be shared 40/60 (to Bow and Adams, respectively). On November 20, 2020, Adams withdrew cash of $111,000. At year-end, May 31, 2021, the Income Summary account had a credit balance of $490,000. On June 1, 2021, Peter Williams invested $131,000 and was admitted to the partnership for a 20% Interest in equity. Required: 1. Prepare journal entries for the following dates. a. June 1, 2020 View transaction list Journal entry worksheet < 1 Record the formation of partnership. Note: Enter debits before credits. Date June 01, 2020 Record entry b. November 20, 2020 View transaction list 1 Journal entry worksheet Note: Enter debits before credits. Date Nov 20, 2020 Record the withdrawal by partner. Record entry c. May 31, 2021 View transaction list Note: Enter debits before credits. Date May 31, 2021 Journal entry worksheet < Record entry Record the closing of profit to capital. d. June 1, 2021 View transaction list General Journal Clear entry Note: Enter debits before credits. Date June 01, 2021 General Journal Record entry Clear entry Journal entry worksheet Bow, capital Aisha Adams, capital Williams, capital Record the admission of Williams for a 20% interest. General Journal Clear entry General Journal Clear entry Debit Debit Debit Debit Credit View general journal Credit View general journal Credit View general journal Credit > View general journal > 2. Calculate the balance in each partner's capital account immediately after the June 1, 2021, entry.

Answer rating: 100% (QA)

1 Journal Entries are as follows a June 1 2020 Debit Cash Ac 291000 Debit Equipment Ac ... View the full answer