Aaron and Kim Form a Partnership by Combining the Assets

question 17

Essay

Aaron and Kim form a partnership by combining the assets of their separate businesses. Aaron contributes accounts receivable with a face amount of $50,000 and equipment with a cost of $180,000 and accumulated depreciation of $100,000. The partners agree that the equipment is to be priced at $68,000, that $3,500 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $2,000 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Kim contributes cash of $21,000 and merchandise inventory of $44,500. The partners agree that the merchandise inventory is to be priced at $48,000. Journalize the entries to record in the partnership accounts (a) Aaron's investment and (b) Kim's investment.

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Definitions:

Technological Advance

The process of developing new and improved methods, tools, or systems that increase productivity, efficiency, or solve existing problems.

Modern View

A contemporary perspective or understanding often reflecting recent developments or ideas.

Traditional View

A perspective or approach that is based on long-established ways of thinking or doing something.

Patent Infringement

The violation of the exclusive rights granted to a patent holder, typically by making, using, or selling a patented invention without permission.