Asked by Megan Lawless on Apr 26, 2024
Verified
Trevor Smith contributed equipment, inventory, and $54,000 cash to a partnership. The equipment had a book value of $30,000 and a market value of $36,000. The inventory had a book value of $60,000, but only had a market value of $20,000, due to obsolescence. The partnership also assumed a $17,000 note payable owed by Smith that was used originally to purchase the equipment.Provide the journal entry for Smith's contribution to the partnership.
Book Value
The net value of a company's assets minus its liabilities, often used to assess its financial worth.
Market Value
The present-day selling or buying price of an asset or service in a market.
Note Payable
A financial obligation or loan documented by a written promissory note specifying the principal amount, interest rate, and maturity date.
- Journalize partnership transactions, including contributions, revaluations, and distributions.
Verified Answer
MA
Mariajose ArangoApr 29, 2024
Final Answer :
Cash 54,000 Inventory 20,000 Equipment 36,000 Notes Payable 17,000 Trevor Smith, Capital 93,000\begin{array}{ll}\text { Cash } & 54,000 \\\text { Inventory } & 20,000 \\\text { Equipment } & 36,000\\\text { Notes Payable } & 17,000 \\\text { Trevor Smith, Capital } & 93,000\end{array} Cash Inventory Equipment Notes Payable Trevor Smith, Capital 54,00020,00036,00017,00093,000
Learning Objectives
- Journalize partnership transactions, including contributions, revaluations, and distributions.
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