On July 1, 2003, Dr. Wright and Dr. O Flaherty decided to form a partnership by combining all the assets and liabilities of their respective dental practices. The partnership will have a new and separate set of books. Dr. Wright s balance sheet at June 30, 2003, was as follows:
|
Assets |
||
|
Cash. |
$ 27,000 |
|
|
Accounts receivable. |
$116,000 |
|
|
Less allowance for uncollectible accounts |
6,600 |
109,400 |
|
Dental equipment |
$ 52,900 |
|
|
Less accumulated depreciation . |
24,200 |
28,700 |
|
Building |
$169,400 |
|
|
Less accumulated depreciation . |
13,500 |
155,900 |
|
Total assets .. |
$321,000 |
|
|
Liabilities and Owner s Equity |
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|
Accounts payable |
$ 22,700 |
|
|
Mortgage payable. |
150,000 |
|
|
Dr. Wright, capital . |
148,300 |
|
|
Total liabilities and owner s equity |
$321,000 |
|
The partners agreed that $5,600 of the accounts receivable were uncollectible and that $2,400= was a reasonable allowance for the un collectibility of the remaining receivables. They also agreed that the dental equipment and the building should be recorded at their respective fair market values of $46,000 and $182,000. Prepare the journal entry to record Dr. Wright s investment in the partnership.