Beyonce Sheffield and Brittany Field decide to form a partnership by combining the assets of their separate businesses

Beyonce Sheffield and Brittany Field decide to form a partnership by combining the assets of their separate businesses. Sheffield contributes the following assets to the partnership: cash, $18,000; accounts receivable with a face amount of $146,000 and an allowance for doubtful accounts of $4,200; merchandise inventory with a cost of $92,000; and equipment with a cost of $136,000 and accumulated depreciation of $45,000.

The partners agree that $5,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, that $5,700 is a reasonable allowance for the uncollectibility of the remaining accounts, that the merchandise inventory is to be recorded at the current market price of $98,400, and that the equipment is to be valued at $81,500.

Journalize the partnership’s entry to record Sheffield’s investment.


Answer:













Cash 18,000
Accounts Receivable* 141,000
Merchandise Inventory 98,400
Equipment 81,500
Allowance for Doubtful Accounts 5,700
Beyonce Sheffield, Capital 333,200
*$146,000 – $5,000