Arthur, Barnett, and Cummings Form a Partnership

question 136

Essay

Arthur, Barnett, and Cummings form a partnership. Arthur contributes $250,000 cash and Barnett contributes $230,000 in cash. Cummings contributes equipment worth $255,000. Prepare the single journal entry to record the formation of this partnership.

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Definitions:

Conforming Goods

Goods that conform to contract specifications.

Contract Specifications

Detailed terms and conditions outlined in a contract that specify the requirements of the agreement.

Good Faith

A fundamental principle in contracts requiring parties to deal with each other honestly and without ulterior motives.

Uniform Commercial Code

A comprehensive set of laws governing commercial transactions in the United States, aimed at harmonizing state laws.