Melissa Myers and Hugo Hernandez form a partnership by combining assets of their
ID: 2500851 • Letter: M
Question
Melissa Myers and Hugo Hernandez form a partnership by combining assets of their former businesses. The following balance sheet information is provided by Myers, sole proprietorship:
Melissa Myers
Balance Sheet
1
Cash
$75,000.00
2
Accounts receivable
$135,000.00
3
Less: Allowance for doubtful accounts
7,200.00
127,800.00
4
Land
215,000.00
5
Equipment
$78,000.00
6
Less: Accumulated depreciation-equipment
41,000.00
37,000.00
7
Total assets
$454,800.00
8
9
Accounts payable
$24,800.00
10
Notes payable
84,000.00
11
Melissa Myers, capital
346,000.00
12
Total liabilities and owner’s equity
$454,800.00
Myers obtained appraised values for the land and equipment as follows:
An analysis of the accounts receivable indicated that the allowance for doubtful accounts should be increased to $9,200.
On December 31, journalize the partnership’s entry for Myers’ investment. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 1
JOURNAL
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Melissa Myers
Balance Sheet
Explanation / Answer
JOURNAL Date Account Debit Credit 1 Cash $75,000 2 Accounts Receivable $1,35,000 3 Land $3,00,000 4 Equipment $32,700 5 Accounts payable $24,800 6 Notes Payable $84,000 7 Allowance for doubtful debts $9,200 8 Melissa Myers, capital $4,24,700