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Partners original investment

Instructions

Hannah Freeman and Hugo Hernandez form a partnership

An unincorporated business form consisting of two or more persons conducting business as co-owners for profit.

by combining assets of their former businesses. The following balance sheet information is provided by Freeman, sole proprietorship:

Question not attempted.

Hannah Freeman Proprietorship

Balance Sheet

June 1, 20Y3

1	Cash		$81,700.00
2	Accounts receivable	$140,610.00
3	Less: Allowance for doubtful accounts	7,400.00	133,210.00
4	Land		225,360.00
5	Equipment	$79,690.00
6	Less: Accumulated depreciation-equipment	44,180.00	35,510.00
7	Total assets		$475,780.00
8
9	Accounts payable		$24,590.00
10	Notes payable		84,020.00
11	Hannah Freeman, capital		367,170.00
12	Total liabilities and owners equity		$475,780.00

Freeman obtained appraised values for the land and equipment as follows:

Land	$293,250
Equipment	31,665

An analysis of the accounts receivable indicated that the allowance for doubtful accounts should be increased to $9,210.

On December 31, journalize the partnerships entry for Freemans investment. Refer to the Chart of Accounts for exact wording of account titles.

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Chart of Accounts

CHART OF ACCOUNTS
Hannah Freeman and Hugo Hernandez
General Ledger
ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Interest Receivable 115 Notes Receivable 116 Inventory 117 Office Supplies 118 Store Supplies 119 Prepaid Insurance 120 Land 123 Equipment 124 Accumulated Depreciation-Equipment 129 Asset Revaluations 133 Patent LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Hannah Freeman, Capital 311 Hannah Freeman, Drawing 312 Hugo Hernandez, Capital 313 Hugo Hernandez, Drawing	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Equipment 523 Delivery Expense 524 Repairs Expense 529 Selling Expenses 531 Rent Expense 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense

Journal

On December 31, journalize the partnerships entry for Freemans investment. Refer to the Chart of Accounts for exact wording of account titles.

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