| | Module 9 Assignment: |
| | Conway and Lawrence form a partnership by combining the assets and liabilities of their respective sole proprietorships. The following are the assets and liabilities of each partner and their market values. |
| | Conway | | | | | | | | Lawrence |
| | Asset | | | Book value | | Market value | | | Asset | | | Book Value | | Market value |
| | Cash | | | $20,000 | | | | | Cash | | | $10,000 |
| | Accounts receivable | | | $5,000 | | $3,000 | | | Equipmnet | | | $50,000 | | $30,000 |
| | Note payable | | | $10,000 | | | | | Accumulated Depreciation | | | $15,000 |
| | Inventory | | | $25,000 | | $28,000 | | | Accounts Payable | | | $7,000 |
| | Requirements: |
| | 1 | Journalize the formation of the partnership. |
| | | Journal |
| | | Accounts | | | | Debit | | Credit |
| | Half way through the first year of operations Conway and Lawrence admit Korman to the partnership. Korman buys a 1/2 share for $37,000 in cash. |
| | 2 | Journalize Korman's admission to the partnership. |
| | | Journal |
| | | Accounts | | | | Debit | | Credit |
| | The net income for the first year of oprations was $50,000. After giving Conway a salary of $20,000, the rest of the net income is split evenly among the partners. |
| | 3 | Prepare an income distribution worksheet. |
| | | Income Distribution |
| | | Net Income | | | | | | | | | $50,000 |
| | | | | | Conway | | Korman | | Lawrence |
| | 4 | Journalize the closing of the income summary accounts to the capital accounts. |
| | | Journal |
| | | Accounts | | | | Debit | | Credit |
| | After 5 years of operation Conway, Korma, and Lawrence decide to dissolve their partnership. The following are the account balances before liquidation begins: |
| | Cash | | | 127,000 | | | | The equipment is sold for $8,000 |
| | Equipment | | | 20,000 |
| | Note Payable | | | | | 6,000 |
| | Capital, Conway | | | | | 65,000 |
| | Capital,Korman | | | | | 40,000 |
| | Capital, Lawrence | | | | | 36,000 |
| | 5 | Complete the liquidating worksheet. |
| | | Liquidation |
| | | | | | Cash | | Equipment | | Note payable | | Conway | | Korman | | Lawrence |
| | 6 | Journalize each step of the closing. |
| | | Journal |
| | | Accounts | | | | Debit | | Credit |
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assignment_mod_09_1.xlsx
