When Disney and Charles Decided to Incorporate Their Partnership, the Trial

question 46

Essay

When Disney and Charles decided to incorporate their partnership, the trial balance was as follows: The partnership's books will be closed, and new books will be used for D & C Corporation. The following additional information is available:
1. The estimated fair values of the assets follow: 2. All assets and liabilities are transferred to the corporation.
3. The common stock is $5 par. Alice and Betty receive a total of 24,000 shares.
4. Disney and Charles share profits and losses in the ratio 6:4.
Required:
a. Prepare the entries on the partnership's books to record (1) the revaluation of assets, (2) the transfer of the assets to the D & C Corporation and the receipt of the common stock, and (3) the closing of the books.
b. Prepare the entries on D & C Corporation's books to record the assets and the issuance of the common stock.

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Definitions:

Water

A colorless, transparent, odorless, liquid that forms the seas, lakes, rivers, and rain and is the basis of the fluids of living organisms.

Cytoskeleton

A network of fibers within a cell that provides structural support, cell shape, and enables cell movement.

Vesicle Formation

The process of creating small, membrane-bound sacs within a cell, used for transporting substances within a cell.

Cell Shape

The form and structure of a cell, which is often related to its function in the body or in a multicellular organism.