On March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $20,960 in cash and merchandise inventory valued at $56,060. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $59,510. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Wallace’s Ledger Agreed-Upon Balance Valuation Accounts Receivable $18,460 $17,560 Allowance for Doubtful Accounts 1,570 1,810 Equipment 83,160 54,420 Accumulated Depreciation 29,820 – Accounts Payable 15,330 15,330 Notes Payable (current) 36,100 36,100 1. Journalize the entries on March 1 to record the investments of Keene and Wallacein the partnership accounts. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. PAGE 5 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 5 6 7 8 9 10 3. After adjustments at February 28, 20Y9, the end of the first full year of operations, the revenues were $290,170 and expenses were $200,100, for a net income of $90,070. The drawing accounts have debit balances of $28,170 (Keene) and $30,200 (Wallace). Journalizethe entries to close the revenues and expenses and the drawing accounts at February 28, 20Y9. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. If required, round your answers to two decimal places. PAGE 20 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Closing Entries 2 3 4 5 6 7 8 9 2. Prepare a balance sheet as of March 1, 20Y8, the date of formation of the partnership of Keene and Wallace. Be sure to complete the statement heading. Refer to the Chart of Accounts and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Enter current assets in order of liquidity. “Less”, “Add”, or colons (:) will automatically appear if required. Enter all amounts as positive numbers. Keene and Wallace Balance Sheet 1 Assets 2 3 4 5 6 7 8 9 10 11 Liabilities 12 13 14 15 16 Partners’ Equity 17 18 19 20 CHART OF ACCOUNTS Keene and Wallace General Ledger ASSETS 110 Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 116 Merchandise Inventory 117 Office Supplies 119 Prepaid Insurance 120 Land 123 Equipment 124 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 211 Notes Payable 212 Interest Payable 213 Sales Tax Payable EQUITY 310 Renee Wallace, Capital 311 Renee Wallace, Drawing 312 Eric Keene, Capital 313 Eric Keene, Drawing REVENUE 410 Revenues EXPENSES 510 Expenses 521 Advertising Expense 522 Depreciation Expense-Equipment 529 Selling Expenses 533 Insurance Expense 534 Office Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense Labels Current assets Current liabilities For the Year Ended March 1, 20Y8 March 1, 20Y8 Property, plant and equipment Amount Descriptions Total assets Total current assets Total liabilities Total liabilities and members’ equity Total liabilities and partners’ equity Total members’ equity Total partners’ equity

On March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $20,960 in cash and merchandise inventory valued at $56,060. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $59,510. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow: Wallace’s Ledger Agreed-Upon Balance Valuation Accounts Receivable $18,460 $17,560 Allowance for Doubtful Accounts 1,570 1,810 Equipment 83,160 54,420 Accumulated Depreciation 29,820 – Accounts Payable 15,330 15,330 Notes Payable (current) 36,100 36,100 1. Journalize the entries on March 1 to record the investments of Keene and Wallacein the partnership accounts. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. PAGE 5 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 5 6 7 8 9 10 3. After adjustments at February 28, 20Y9, the end of the first full year of operations, the revenues were $290,170 and expenses were $200,100, for a net income of $90,070. The drawing accounts have debit balances of $28,170 (Keene) and $30,200 (Wallace). Journalizethe entries to close the revenues and expenses and the drawing accounts at February 28, 20Y9. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. If required, round your answers to two decimal places. PAGE 20 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Closing Entries 2 3 4 5 6 7 8 9 2. Prepare a balance sheet as of March 1, 20Y8, the date of formation of the partnership of Keene and Wallace. Be sure to complete the statement heading. Refer to the Chart of Accounts and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Enter current assets in order of liquidity. “Less”, “Add”, or colons (:) will automatically appear if required. Enter all amounts as positive numbers. Keene and Wallace Balance Sheet 1 Assets 2 3 4 5 6 7 8 9 10 11 Liabilities 12 13 14 15 16 Partners’ Equity 17 18 19 20 CHART OF ACCOUNTS Keene and Wallace General Ledger ASSETS 110 Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 116 Merchandise Inventory 117 Office Supplies 119 Prepaid Insurance 120 Land 123 Equipment 124 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 211 Notes Payable 212 Interest Payable 213 Sales Tax Payable EQUITY 310 Renee Wallace, Capital 311 Renee Wallace, Drawing 312 Eric Keene, Capital 313 Eric Keene, Drawing REVENUE 410 Revenues EXPENSES 510 Expenses 521 Advertising Expense 522 Depreciation Expense-Equipment 529 Selling Expenses 533 Insurance Expense 534 Office Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense Labels Current assets Current liabilities For the Year Ended March 1, 20Y8 March 1, 20Y8 Property, plant and equipment Amount Descriptions Total assets Total current assets Total liabilities Total liabilities and members’ equity Total liabilities and partners’ equity Total members’ equity Total partners’ equity

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 14P

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Related questions

Question

	Wallace’s Ledger	Agreed-Upon
Balance	Valuation
Accounts Receivable	$18,460	$17,560
Allowance for Doubtful Accounts	1,570	1,810
Equipment	83,160	54,420
Accumulated Depreciation	29,820	–
Accounts Payable	15,330	15,330
Notes Payable (current)	36,100	36,100

1. Journalize the entries on March 1 to record the investments of Keene and Wallacein the partnership accounts. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

PAGE 5

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10

3. After adjustments at February 28, 20Y9, the end of the first full year of operations, the revenues were $290,170 and expenses were $200,100, for a net income of $90,070. The drawing accounts have debit balances of $28,170 (Keene) and $30,200 (Wallace). Journalizethe entries to close the revenues and expenses and the drawing accounts at February 28, 20Y9. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. If required, round your answers to two decimal places.

PAGE 20

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1		Closing Entries
2
3
4
5
6
7
8
9

2. Prepare a balance sheet as of March 1, 20Y8, the date of formation of the partnership of Keene and Wallace. Be sure to complete the statement heading. Refer to the Chart of Accounts and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Enter current assets in order of liquidity. “Less”, “Add”, or colons (:) will automatically appear if required. Enter all amounts as positive numbers.

Keene and Wallace

Balance Sheet

1	Assets
2
3
4
5
6
7
8
9
10
11	Liabilities
12
13
14
15
16	Partners’ Equity
17
18
19
20

CHART OF ACCOUNTS

Keene and Wallace

General Ledger

	ASSETS
110	Cash
112	Accounts Receivable
113	Allowance for Doubtful Accounts
116	Merchandise Inventory
117	Office Supplies
119	Prepaid Insurance
120	Land
123	Equipment
124	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
211	Notes Payable
212	Interest Payable
213	Sales Tax Payable

	EQUITY
310	Renee Wallace, Capital
311	Renee Wallace, Drawing
312	Eric Keene, Capital
313	Eric Keene, Drawing

	REVENUE
410	Revenues

	EXPENSES
510	Expenses
521	Advertising Expense
522	Depreciation Expense-Equipment
529	Selling Expenses
533	Insurance Expense
534	Office Supplies Expense
536	Credit Card Expense
537	Cash Short and Over
538	Bad Debt Expense
539	Miscellaneous Expense

Labels
Current assets
Current liabilities
For the Year Ended March 1, 20Y8
March 1, 20Y8
Property, plant and equipment
Amount Descriptions
Total assets
Total current assets
Total liabilities
Total liabilities and members’ equity
Total liabilities and partners’ equity
Total members’ equity
Total partners’ equity

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