CHAPTER 15, 6 PLEASE READ: This is one question that has three parts (a--c), ple
ID: 2394688 • Letter: C
Question
CHAPTER 15, 6
PLEASE READ: This is one question that has three parts (a--c), please answer the FULL question, please TYPE your answer, please LABEL your answer. Thank you in advance.
The partnership of Jordan and O'Neal began business on January 1, 20X7. Each partner contributed the following assets (the noncash assets are stated at their fair values on January 1, 20X7): Jordan O'Neal 61,000 50,300 80,500 Cash Inventories Land Equipment -0-131,100 100,200 The land was subject to a $51,700 mortgage, which the partnership assumed on January 1, 20X7. The equipment was subject to an installment note payable that had an unpaid principal amount of $21,900 on January 1, 20X7. The partnership also assumed this note payable. Jordan and O'Neal agreed to share partnership income and losses in the following manner: Jordan O'Neal 3% Interest on beginning capital balances Salaries Remainder 3% $13,100 $13,100 60% 40%Explanation / Answer
Answer a. Journal Entry Date Particulars Dr. Amt. Cr. Amt. a. Cash 111,300.00 Inventory 80,500.00 Land 131,100.00 Equipment 100,200.00 Mortgage Payable 51,700.00 Installment Note Payable 21,900.00 Jordan, Capital 219,800.00 $61,000 + $80,500 + $100,200 - $21,900 O'Neal, Capital 129,700.00 $50,300 + $131,100 - $51,700 (To record the Investment by the partners) A. Inventory 30,300.00 Cash 23,400.00 $30,300 - $6,900 Accounts Payable 6,900.00 (To record the purchase of inventory) B. Mortgage Payable 5,900.00 Interest Expense 2,200.00 Cash 8,100.00 (To record the installment on motgage paid) C. Installment Note Payable 3,800.00 Interest Expense 2,300.00 Cash 6,100.00 (To record the installment on note paid) D. Accounts Receivable 22,700.00 Cash 133,300.00 $156,000 - $22,700 Sales 156,000.00 (To record the sales) E. Selling & General Expenses 34,400.00 Cash 27,300.00 $34,400 - $7,100 Accrued Expenses Payable 7,100.00 (To record the selling & general expenses) F. Depreciation Expense 6,200.00 Accumulated Depreciation 6,200.00 (To record the depreciation expenses) G. Jordan, Drawing 11,960.00 $230 X 52 Weeks O'Neal, Drawing 11,960.00 $230 X 52 Weeks Cash 23,920.00 (To record the drawings of partners) H. Sales 156,000.00 Income Summary 156,000.00 (To record the clsoe of sales account) I. Cost of Goods sold 90,100.00 $80,500 + $30,300 - $20,700 Inventory 90,100.00 (To record the cost of Goods Sold) J. Income Summary 135,200.00 Cost of Goods sold 90,100.00 Selling & General Expenses 34,400.00 Depreciation Expense 6,200.00 Interest Expense 4,500.00 (To record the close of expense accounts) K. Income Summary 20,800.00 $156,000 - $135,200 Jordan, Capital 10,163.00 O'Neal, Capital 10,637.00 (To record the transfer of Income) L. Jordan, Capital 11,960.00 O'Neal, Capital 11,960.00 Jordan, Drawing 11,960.00 O'Neal, Drawing 11,960.00 (to record the closing of Drawings Accounts) Allocation of Profits: Jordan O'Neal Total Net Income (Loss) 20,800.00 Interest Allowance - 3% 6,594.00 3,891.00 10,485.00 Balance of Income (Loss) 10,315.00 Salaries 13,100.00 13,100.00 26,200.00 Balance of Income (Loss) (15,885.00) Balance allocated - 60%:40% (9,531.00) (6,354.00) (15,885.00) Balance of Income (Loss) - Shares to partners 10,163.00 10,637.00 Answer b. JORDAN - O'NEAL PARTNERSHIP Income Statement For the Year Ended Dec 31, 20X7 Sales 156,000.00 Cost of Goods Sold: Inventory, Jan 1 80,500.00 Add: Purchases 30,300.00 Goods Available for Sale 110,800.00 Less: Ending Inventory, Dec 31 20,700.00 Cost of Goods Sold 90,100.00 Gross Profit 65,900.00 Selling & General Expenses 34,400.00 Depreciation Expense 6,200.00 40,600.00 Operating Income 25,300.00 Non Operating Expense - Interest 4,500.00 Net Income 20,800.00 Answer c. JORDAN - O'NEAL PARTNERSHIP Balance Sheet At Dec 31, 20X7 Assets Current Assets: Cash 155,780.00 Accounts Receivable 22,700.00 Inventory 20,700.00 Total Current Assets 199,180.00 Property, Plant & Equipment Land 131,100.00 Equipment 100,200.00 Accumulated Depreciation (6,200.00) 94,000.00 Total Property, Plant & Equipment 225,100.00 Total Assets 424,280.00 Liabilities & Capital Current Liabilities Accounts Payable 6,900.00 Accrued Expenses Payable 7,100.00 Total Current Liabilities 14,000.00 Long-Term Liabilities Mortgage Payable 45,800.00 Installment Note Payable 18,100.00 Total Long-Term Liabilities 63,900.00 Total Liabilities 77,900.00 Capital: Jordan, Capital 218,003.00 O'Neal, Capital 128,377.00 Total Capital 346,380.00 Total Liabilities & Capital 424,280.00