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Answer Summer 2020 Exercise9a

Gentry and Noel form a partnership, with Gentry contributing assets with a book value of $530,000 and a market value of $630,000. Noel contributes $70,000 cash for a 20% interest in the partnership. Journal entries are made to record Gentry's investment at market value totals, and Noel's $70,000 cash contribution, with $50,000 going to increase Gentry's capital account and $120,000 to open Noel's capital account. Similarly, Jeff Layton and Nicholas Fell form a partnership, with Jeff contributing assets with a book value of $700,000 and a market value of $830,000. Nicholas contributes $120,000

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547 views2 pages

Answer Summer 2020 Exercise9a

Gentry and Noel form a partnership, with Gentry contributing assets with a book value of $530,000 and a market value of $630,000. Noel contributes $70,000 cash for a 20% interest in the partnership. Journal entries are made to record Gentry's investment at market value totals, and Noel's $70,000 cash contribution, with $50,000 going to increase Gentry's capital account and $120,000 to open Noel's capital account. Similarly, Jeff Layton and Nicholas Fell form a partnership, with Jeff contributing assets with a book value of $700,000 and a market value of $830,000. Nicholas contributes $120,000

Uploaded by

Miko Arniño
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PROBLEM 1:

Gentry, sole proprietor of a hardware business, decides to form a partnership with Noel. Gentry’s
accounts are as follows:

Book Value Market Value


Cash P 20,000 P  20,000
Accounts Receivable (net) 52,000 45,000
Inventory 112,000   125,000
Land 40,000   100,000
Building (net) 300,000   340,000
Accounts Payable 25,000     25,000
Mortgage Payable 75,000     75,000

Noel agrees to contribute P70,000 for a 20% interest. Journalize the entries to record (a) Gentry’s
investment and (b) Noel’s investment.

(a) Cash 20,000


Accounts Receivable 45,000
Inventory 125,000
Land 100,000
Building 340,000
Accounts Payable 25,000
Mortgage Payable 75,000
Gentry, Capital 530,000

(b) Cash 70,000


Gentry, Capital 50,000
Noel, Capital 120,000

PROBLEM 2:

Jeff Layton, sole proprietor of a hardware business, decides to form a partnership with Nicholas Fell.
Jeff’s accounts are as follows:

Book Value Market Value


Cash P 30,000 P  30,000
Accounts Receivable (net) 55,000 45,000
Inventory 112,000 135,000
Land 40,000 100,000
Building (net) 500,000 540,000
Accounts Payable 25,000 25,000
Mortgage Payable 125,000 125,000

Nicholas agrees to contribute P120,000 for a 20% interest. Journalize the entries to record (a) Jeff’s
investment and (b) Nicholas’ investment.
(a) Cash 30,000
Accounts Receivable 45,000
Inventory 135,000
Land 100,000
Building 540,000
Accounts Payable 25,000
Mortgage Payable 125,000
Jeff Layton, Capital 700,000

(b) Cash 120,000


Jeff Layton, Capital 44,000
Nicholas Fell, Capital 164,000

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