Chapter 5
Partnerships
234
Application Questions Group B
AP-1B (
3
)
Ted Coverdale and Julio Kadlec set up a new partnership on March 10, 2016. Ted contributes
a warehouse and land worth a combined $1,000,000. Market value of the warehouse
is $300,000. Julio contributes $1,000,000 in cash. Write the journal entry to record the
contributions to the partnership.
Date
Account Title and Explanation
Debit
Credit
AP-2B (
1
3
)
AndrewWatson and Baker Ford formed a partnership on January 1, 2016 to supply bottled
water to businesses. Andrew contributed $10,000 cash and a vehicle with a book value $6,000.
Baker brought $6,000 cash and equipment with a book value $10,000. An independent
appraiser determined that the vehicle is valued at $5,500 and the equipment is valued at
$8,800.
Required
a) Prepare a journal entry to record formation of the business.
Date
Account Title and Explanation
Debit
Credit
