Question : Short Answer Questions 58. Janice Miller operates a sole proprietorship business that : 1197649

Short Answer Questions

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.

59. Mary Ann Mason operates a sole proprietorship business that sells craft supplies. On January 1, 2013, Mason has agreed to transfer her assets and liabilities to a partnership that will operate The Craft Company. Mason will own a one-third interest in the capital of the partnership. The agreed upon values of assets and liabilities to be transferred follow.

Accounts receivable of $2,000 (of which approximately $200 is uncollectible)

Merchandise inventory, $4,000

Furniture and fixtures, $6,000

Accounts payable, $1,000

Record the receipt of the assets and liabilities by the partnership on page 1 of a general journal. Omit the description.

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.

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.