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LESSON 23-1

LESSON 23-1. Forming a Partnership. 4. 4. INITIAL INVESTMENTS BY OWNERS. page 676. January 1. Received cash from partner, Sawyer Hess, as an initial investment, $15,000.00. Receipt No. 1.

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LESSON 23-1

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  1. LESSON 23-1 Forming a Partnership

  2. 4 4 INITIAL INVESTMENTS BY OWNERS page 676 January 1. Received cash from partner, Sawyer Hess, as an initial investment, $15,000.00. Receipt No. 1. January 1. Received cash, $10,000.00, and office equipment valued at $5,000.00, from partner, Kendra Sullivan, as an initial investment. Receipt No. 2. 1 2 3 5 1. Write the date. 4. Write the debit and credit amounts. 2. Write the account titles. 5. Write the debits to Cash. 3. Write the receipt numbers. LESSON 23-1

  3. WITHDRAWAL OF CASH BY PARTNER page 677 January 15. Kendra Sullivan, partner, withdrew cash for personal use, $500.00. Check No. 10. 1 2 3 4 5 1. Write the date. 2. Write the title of the account debited. 3. Write the check number. 4. Write the debit amount. 5. Write the credit amount. LESSON 23-1

  4. WITHDRAWAL OF MERCHANDISE BY PARTNER page 678 January 15. Sawyer Hess, partner, withdrew merchandise for personal use, $200.00. Memorandum No. 1. 2 3 4 1 5 6 1. Write the date. 4. Write the debit amount. 2. Write the account title. 5. Write the account title. 3. Write the memorandum number. 6. Write the credit amount. LESSON 23-1

  5. TERMS REVIEW page 679 • partnership • partner • partnership agreement LESSON 23-1

  6. LESSON 23-2 Distribution of Net Income and Owners’ Equity Statements

  7. DISTRIBUTION OF NET INCOME STATEMENT page 680 1 2 3 4 5 6 7 8 5. Second partner’s share of net income 1. Heading 2. First partner’s name 6. Write Net Income 3. First partner’s share of net income 7. Total net income 8. Double lines 4. Second partner’s name LESSON 23-1

  8. DISTRIBUTION OF NET INCOME STATEMENT WITH UNEQUAL DISTRIBUTION OF EARNINGS page 681 LESSON 23-1

  9. PARTNERS’ CAPITAL AND DRAWING ACCOUNTS page 682 LESSON 23-1

  10. OWNERS’ EQUITY STATEMENT page 683 1. Heading 1 2. First partner’s name 2 3. First partner’s ending capital 4. Second partner’s name 3 4 5. Second partner’s ending capital 5 6. Total Owners’ Equity 6 7 7. Double lines LESSON 23-1

  11. OWNERS’ EQUITY STATEMENT WITH AN ADDITIONAL INVESTMENT AND A NET LOSS page 684 LESSON 23-1

  12. BALANCE SHEET FOR A PARTNERSHIP page 684 LESSON 23-1

  13. TERMS REVIEW page 685 • distribution of net income statement • owners’ equity statement LESSON 23-1

  14. LESSON 23-3 Dissolving a Partnership

  15. ACCOUNT BALANCES BEFORE REALIZATION page 686 LESSON 23-1

  16. Value of Asset Received – Book Value ofAsset Sold = Gain on Realization Cash $13,000.00 – Cost $20,000.00 Accum. Depr. 8,000.00 Book Value $12,000.00 = $1,000.00 GAIN ON REALIZATION page 686 August 1, 20--. Received cash from sale of truck, $13,000.00: original cost, $20,000.00; total accumulated depreciation recorded to date, $8,000.00. Receipt No. 316. 1 2 1. Calculate the gain. 2. Record the entry. LESSON 23-1

  17. Value of Asset Received – Book Value ofAsset Sold = Loss on Realization Cash $1,100.00 – Supplies $1,500.00 = $(400.00) LOSS ON REALIZATION page 687 August 1. Received cash from sale of supplies, $1,100.00; balance of supplies account, $1,500.00. Receipt No. 317. 1 2 1. Calculate the loss. 2. Record the entry. LESSON 23-1

  18. LIQUIDATING LIABILITIES page 688 August 4, 20--. Paid cash to all creditors for the amounts owed, $4,000.00. Check No. 422. LESSON 23-1

  19. ACCOUNT BALANCES AFTER LIQUIDATION OF NONCASH ASSETS AND PAYMENT OF LIABILITIES page 688 LESSON 23-1

  20. Balance of Loss and Gain on Realization × Fixed Percentage = Share of the Balance of Loss and Gain on Realization Walker Jeter Total $600.00 $600.00 × × 60% 40% = = $360.00 240.00 $600.00 DISTRIBUTING LOSS OR GAIN ON REALIZATION TO PARTNERS page 689 August 6, 20--. Recorded distribution of gain on realization: to Adam Walker, $360.00; to Shirley Jeter, $240.00. Memorandum No. 412. 1 1. Calculate each partner’s share of gain or loss. 2. Record entry to distribute gain or loss. 2 LESSON 23-1

  21. DISTRIBUTING REMAINING CASH TO PARTNERS page 689 August 6. Recorded final distribution of remaining cash to partners: to Adam Walker, $18,360.00; to Shirley Jeter, $12,740.00. Check Nos. 423 and 424. LESSON 23-1

  22. TERMS REVIEW page 690 • liquidation of a partnership • realization • limited liability partnership (LLP) LESSON 23-1

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