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Chapter 19 - Accounting for Partnerships
55. Kara Johnson and Tyler Jones are partners, and each has a capital balance of $100,000. To
gain admission to the partnership, Raiden Nash pays $60,000 directly to Johnson for one-half
of her equity. After the admission of Nash, the total partners' equity in the records of the
partnership will be
56. If an individual invests more cash for an interest in an existing partnership than the book
value of his or her interests, an entry is made to debit
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58. Janice Miller operates a sole proprietorship business that sells camping equipment. On
January 1, 2013, Miller has agreed to transfer her assets and liabilities to a partnership that
will operate The Camping Company. Miller will own a two-thirds interest in the capital of the
partnership. The agreed upon values of assets and liabilities to be transferred follow.
Accounts receivable of $50,000 (of which approximately $2,000 is uncollectible)
Merchandise inventory, $90,000
Furniture and fixtures, $60,000
Accounts payable, $32,000
Record the receipt of the assets and liabilities by the partnership on page 1 of a general
journal. Omit the description.
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60. Blake Kredell owns and operates a retail business called Blake's Camera Shop. His
postclosing trial balance on December 31, 2013, is provided below. Blake plans to enter into a
partnership with Carmen Santos, effective January 1, 2014. Profits and losses will be shared
equally. Blake will transfer all assets and liabilities of his store to the partnership, after
revaluation. Santos will invest cash equal to Blake's investment after revaluation. The agreed
values are: Accounts Receivable (net), $7,500; Merchandise Inventory, $27,000; and Store
Equipment, $8,000.The partnership will operate under the name Picture Perfect. Record each
partner's investment on page 1 of a general journal. Omit descriptions.
Prepare a balance sheet for Picture Perfect just after the investments.
Chapter 19 - Accounting for Partnerships
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61. Patsy Garrison owns and operates a bakery called Patsy's Pasteries. Her postclosing trial
balance on December 31, 2013, is provided below. Garrison plans to enter into a partnership
with Erika Noreen, effective January 1, 2014. Profits and losses will be shared equally.
Garrison will transfer all assets and liabilities of her store to the partnership, after revaluation.
Noreen will invest cash equal to Garrison's investment after revaluation. The agreed values
are: Accounts Receivable (net), $15,000; Merchandise Inventory, $54,000; and Store
Equipment, $16,000. The partnership will operate under the name Baker's Delight. Record
each partner's investment on page 1 of a general journal. Omit descriptions.
Prepare a balance sheet for Baker's Delight just after the investments.
Chapter 19 - Accounting for Partnerships
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62. Brian McCarthy owns and operates a business called Brian's Music Shop. His postclosing
trial balance on December 31, 2013, is provided below. Brian plans to enter into a partnership
with Emma Jones, effective January 1, 2014. Profits and losses will be shared equally. Brian
will transfer all assets and liabilities of his shop to the partnership, after revaluation. Emma
will invest cash equal to Brian's investment after revaluation. The agreed values are: Accounts
Receivable (net), $10,000; Merchandise Inventory, $35,000; and Store Equipment, $15,000.
The partnership will operate under the name Beautiful Music. Record each partner's
investment on page 1 of a general journal. Omit descriptions.
Prepare a balance sheet for Beautiful Music just after the investments.
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