On January 1, 2020, Steve Furlong and Mark Pippy Agreed

question 80

Essay

On January 1, 2020, Steve Furlong and Mark Pippy agreed to pool their assets and form a partnership called F&P Computing. They agree to share all profits equally and make the following initial investments: On December 31, 2020, the partnership reported a loss for the year of $ 19,500. On January 1, 2021, Furlong and Pippy agreed to accept Nicholas Adams into the partnership by purchasing 20% of Pippy's interest in the partnership and 30% of Furlong's interest. The partnership agreement is amended to provide for the following sharing of profit and losses: For the year ended December 31, 2021, profit was $ 350,000.
Instructions
a) Journalize the following transactions:
(1) the initial contributions to the partnership by Furlong and Pippy on January 1, 2020.
(2) the allocation of the loss to the partners at the end of December 2020.
(3) the purchase of the partnership interest by Adams on January 1, 2021.
b) Prepare a schedule to show the division of profit at December 31, 2021.

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Definitions:

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