brief exercises be 160 draper and becker decide to organize a partnership draper inv 4325017

BRIEF EXERCISES

BE 160

Draper and Becker decide to organize a partnership. Draper invests $25,000 cash, and Becker contributes $5,000 and equipment having a book value of $7,000 and a fair value of $15,000.

Instructions

Prepare the entry to record each partner’s investment.

BE 161

Sonoma Company and Woodberry Company decide to merge their proprietorships into a partnership called Sonberry Company. The balance sheet of Woodberry Company shows:

Accounts Receivable$18,000

Less:  Allowance for doubtful accounts    1,500$16,500

Equipment$20,000

Less:  Accumulated depreciation—equip.  10,000$10,000

The partners agree that the net realizable value of the receivables is $16,000 and that the fair value of the equipment is $15,000.

Instructions

Indicate how the four accounts should appear in the opening balance sheet of the partnership.

BE 162

The Fig & Olive Co. reports net income of $24,000. Interest allowances are Fig $3,000 and Olive $5,000; partner salary allowances are Fig $18,000 and Olive $10,000 and the remainder is shared equally.

Instructions

Indicate the division of net income to each partner, and prepare the entry to distribute the net income.

BE 163

Southern Skies Co. had beginning capital balances on January 1, 2017, as follows: Patty Sharp $30,000 and Jim O’Connor $25,000. During the year, drawings were Sharp $15,000 and O’Connor $8,000. Net income was $40,000, and the partners share income equally.

Instructions

Prepare the partners’ capital statement for the year.

BE 164

After liquidating noncash assets and paying creditors, account balances in the Main Co. are Cash $29,000, Art, Capital (Cr.) $11,000, Bob, Capital (Cr,) $8,000 and Cam, Capital (Cr.) $10,000. The partners share income equally.

Instructions

Journalize the final distribution of cash to the partners.

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