Lynn Goodman, sole proprietor of hardware business decides to form a patnershipwith Ned Johns....

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Lynn Goodman, sole proprietor of hardware business decides to form a patnershipwith Ned Johns. Lynn's accounts are as follows: Book Value Agreed Market Value Cash
 30,000 30,000 Accounts Receivable 55,000 45,000 Inventory 112,000 135,000 Land 40,000 100,000 Building (net) 500,000 540,000 Accounts Payable 25,000 25,000
 Mortgage Payable 125,000 125,000 Ned agrees to contribute 120,000 for a 20% interest. Journalize the entries to record (a) Lynn's Investment (b) Ned's Investment

Robert · Accepted Answer

Asset 
Liabilities 
Cash 30,000
Accounts Receivable 45,000
Inventory 135,000
Land 100,000
Building 540,000
Accounts Payable
25,000 
Mortgage Payable
125,000 
Lynn’s  Capital (Asset – Liabilities) 
(850,000 – 150,000 =$700,000)  
700,000
Cash 120,000
Lynn’s Capital (120,000 -30000) 90,

Lynn Goodman, sole proprietor of hardware business decides to form a patnershipwith Ned Johns. Lynn's accounts are as follows: Book Value Agreed Market Value Cash 30,000 30,000 Accounts Receivable...

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