Accounting for information of partnership, Britney O Grady operates to small shop that sells fishing equipment; her post closing trial balance on December 31, 2010 is shown below. Britney plans to enter into a partnership with Inez Loche, effective January 1, 2011. Profit in loan losses will be shared equally Britney is to transfer all assets and liabilities of first door to the partnership after revaluation as agreed. Loche will invest cash equal to Britney's investment after revaluation. The agreed values are Accounts Receivable (net) 13,500, merchandise inventory, is 48,900, and furniture and equipment, is 11,300. The partnership will operate as O Grady and Loche anglers’ outpost. O Grady tackle center Post closing trial balance December 31, 2010 Accounts name debit credit Cash 3750.00 Accounts Receivable 14900.00 Allowance of doubtful accounts 1500.00 Merchandise inventory 44,000.00 furniture and equipment 28,100.00 Accumulated depreciation 22,000.00 Accounts Payable 3,000.00 Capital 64,250.00 Totals 90,750.00 90,750.00 Instructions 1. In general Journal form prepare the entry to record,
a. The receipt of O Grady’s investment of assets and liabilities by the partnership.
Cash Dr. 3750
Accounts Receivable Dr 13,500
Merchandise inventory Dr 48,900
Furniture and equipment Dr 11,300
Account payable Cr. 3000
Grady Capital Cr. 74450
B The receipt of Loche investment of cash.
Cash Dr. 74450
Loche Capital CR. 74450
2 The. Balance sheet for O Grady and Loche anglers’ outpost just after the investment
Assets
Cash . 78200
Accounts Receivable 13,500
Merchandise inventory 48,900
Furniture and equipment 11,300
Total Assets 151900
Liabilities and capital
Account payable 3000
Grady Capital 74450
Loche Capital 74450 148900
Total liabilities and capital 151900
Analyze: by what net amount were the net assets O Grady's tackle center adjusted before they were transferred to the partnership?
Net assets as per balance sheet before transfer 67250
Less transferred to partnership 77450
Net addition to the value of assets 10200
Analyzing; what percentage of authorized common stock has been issued as of January 1, 2011 Issuing stock at par and no par value, recording organizations cost, and preparing a balance sheet. Denton Corporation, a new corporation, took over the assets and liabilities of Denton art on January 2, 2010. The assets and liabilities are appropriate revaluations by Denton are as follows. Cash 47,200 Accounts Receivable 354,800 Allows for doubtful accounts (9,600) Merchandise inventory 660,000 Accounts Payable (372,000) Accrued expense payable (19,200) Corporation authorized to issue 600,000 shares of $15 per-value common stock and 400,000 shares of $ 10 par- value preferred stock. The preferred stock bears a stated yearly dividend rate of one dollar per share. The transactions that follow were entered into at the time the Corporation was formed. Instructions:
1. Make a general Journal entry to record the transactions.
Cash DR. 47,200
Accounts Receivable Dr. 345200
Merchandise inventory Dr. 660,000
Accounts Payable Cr. 372,000
Accrued expense payable Cr. 19,200
Common stock Cr. 661200
Cash Dr. 90000
Common stock Cr. 60000
Preferred stock Cr. 30000
2. Prepare the opening balance sheet as of January 2, 2010 for Denton Corporation.
Assets
Cash 137,200
Accounts Receivable . 345200
Merchandise inventory . 660,000
Total Assets 1142400
Liabilities and capital
Accounts Payable Cr. 372,000
Accrued expense payable Cr. 19,200
Total liabilities 391200
Common stock ( Authorized .6 m, issued48080) 721200
Preferred stock (Authorized .4 m, issued 3000) 30000
Total contributed capital 751200
Total liabilities and capital 1142400
Analyze: what is the current ratio for corporations at January 2, 2000?
1142400/391200 = 2.92 times.