Trevor Smith Contributed Equipment, Inventory, and $54,000 Cash to a Partnership

question 95

Essay

Trevor Smith contributed equipment, inventory, and $54,000 cash to a partnership. The equipment had a book value of $30,000 and a market value of $36,000. The inventory had a book value of $60,000, but only had a market value of $20,000, due to obsolescence. The partnership also assumed a $17,000 note payable owed by Smith that was used originally to purchase the equipment.​Provide the journal entry for Smith's contribution to the partnership.

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Definitions:

Hallucinogens

Substances, including LSD and MDMA (ecstasy), that produce perceptual illusions and distortions even in small doses.

Peyote

A small, spineless cactus containing psychoactive alkaloids, particularly mescaline, used primarily in Native American spiritual practices for its hallucinogenic properties.

Inhalants

Solvents, such as gasoline, glue, or paint thinner, that one inhales to produce a high and that can cause permanent central nervous system damage as well as liver and kidney disease.

Inhalant Use

The act of inhaling substances, often household or industrial chemicals, to achieve a psychoactive or mind-altering effect.