Carol Luongo and Christine Rennek formed a partnership on March 15, 2016. The pa

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Carol Luongo and Christine Rennek formed a partnership on March 15, 2016. The partners agreed to contribute equal amounts of capital. Luongo contributed her sole proprietorship's assets and liabilities (credit balances in parentheses) as follows: (Click the icon to view the book and market values of the sole proprietorship.) On March 15, Rennek contributed cash in an amount equal to the current market value of Luongo's partnership capital. The partners decided that Luongo wil earn 60% of partnership profits because she will manage the business. Rennek agreed to accept 40% of the profits. During the period ended December 31, the partnership earned net income of $80,000. Luongo's withdrawals were $43,000, and Rennek's withdrawings totaled $25,000,

Explanation / Answer

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Solution 2:

Solution 3:

Journal Entries Date Particulars Debit Credit 15-Mar-16 Accounts receivables Dr $10,600.00 Merchandise inventory Dr $33,000.00 Prepaid Expense Dr $2,700.00 Store Equipment Dr $20,000.00             To Accounts Payable $28,000.00             To Carol Loungo's Capital $38,300.00 (Being assets contributed by partner in partnership) 15-Mar-16 Cash Dr $38,300.00             To Chirstine Rennek's Capital $38,300.00 (Being cash contributed by partner in partnership)

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