Problems -
1. Nancy Drew and John Hardy agreed to form a partnership and create the Drew and Hardy Detective Agency. Nancy Drew is investing $150,000 and an Office Building valued at $75,000. John Hardy is investing $50,000 cash and computer equipment valued at $65,000. Record the journal entries to form this partnership.
2. Thomas Jackson and Craig Asus have capital balances of $56,000 and $85,000 respectively. Their business earned a profit of $145,000 and is allocated on a percentage of their capital balances. Determine the amount of profit earned by each partner.
3. Vernon Davis and Eli Manning have been partners for ten years. Vernon Davis's current capital balance is $75,000 and Eli Manning's current capital balance is $55,000. They allocate their profits based on the following: Vernon Davis receives a salary allowance of $35,000 and Eli Manning earns a salary allowance of $28,000. Each partner then receives a 10% return on their current capital balance. Finally, any remaining profit is evenly split between them. Determine the income allocation for each employee.
4. Glen Beck and Michael Savage are business partners. Glen Beck's current capital balance is $100,000 and Michael Savage's capital balance is $85,000. Sean Hannity is purchasing 50% of Michael Savages interest in the partnership for $100,000. Record the journal entry to admit Sean Hannity into the partnership.
5. Prepare journal entries for the following selected transactions related to this company's stock during the current year:
Mar. 1 Purchased 10,000 shares of treasury stock for $17 per share.
May 5 Sold 4,000 shares of treasury stock for $16 per share.
Oct. 12 Sold 2,000 shares of treasury stock for $18 per share.
6. The Jefferson Cleaning Company had sales of $50,000 in 2015 of which $5,000 was cash. The company estimates that 5% of its credit sales would be uncollectible.
The Bunker Company had an accounts receivable balance of $145,000. The company estimates that 4% of its receivables will go uncollected. The current balance in the allowance for doubtful accounts is a debit of $500.00.
Record the journal entries for the above transactions.