Tommy and Gilbert agree to combine their businesses and form a partnership on 3 January...
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Accounting
Tommy and Gilbert agree to combine their businesses and form a partnership on 3 January 2015. They agree that their opening capital balances in the new partnership should be the same and set the amount at $100 000, and they also agree to use direct method to maintain its bad debts. The fair value and the carrying amount of the assets contributed by each partner and the liabilities assumed by the partnership are shown below:
Tommy
Gil
carry amount fair value
carry amount fair value
cash at bank
6,200 6,200
5,800 5,800
accounts receivable
13,000 12,800
15,000 11,400
Inventory
22,000 21,500
18,500 18,300
Equipment
72,000 48,000
75,000 32,000
Accumdepreciation
(18,600) -
(26,500) -
Accounts payable
13,400 13,400
12,800 12,800
Required
Prepare entries in general journal form to record the formation of the partnership (ignore GST)
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