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Provide the compound journal entry

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Reference no: EM132789863

Sunny and Gloomy contributed the following in the formation of a partnership business:

Sunny

Cash 180,000

Accounts Receivale 100,000

Inventory 160,000

Total 440,000

Groomy

Land (at historical cost) 340,000

Total: 340,000

Additional information:

  1. Only 60% of the accounts receivable is recoverable.
  2. The net realizable value of the inventory is 120,000. Sunny acquired the inventory on account; the partnership will assume the unpaid balance of 60,000.
  3. The land has fair value of 600,000

Sunny and Gloomy agreed to have equal credits to their capital accounts. The bonus method shall be used.

Requirement:

Problem A. Provide the compound journal entry

Problem B. Provide the simple journal entries

Reference no: EM132789863

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