1. LESSON 2-1 Forming a Partnership
1/16/2019
LESSON 23-1
Forming a Partnership

2. INITIAL INVESTMENTS BY OWNERS
page 676
January 1. Received cash from partner, Sawyer Hess, as an initial investment, $15, Receipt No. 1.
January 1. Received cash, $10,000.00, and office equipment valued at $5,000.00, from partner, Kendra Sullivan, as an initial investment. Receipt No. 2. 1 2 3 4 5
1. Write the date.
4. Write the debit and credit amounts.
2. Write the account titles.
5. Write the debits to Cash.
3. Write the receipt numbers.
2-1/19

3. WITHDRAWAL OF CASH BY PARTNER
page 677
January 15. Kendra Sullivan, partner, withdrew cash for personal use, $ Check No. 10. 1 2 3 4 5
1. Write the date.
2. Write the title of the account debited.
3. Write the check number.
4. Write the debit amount.
5. Write the credit amount.
2-1/19

4. WITHDRAWAL OF MERCHANDISE BY PARTNER
page 678
January 15. Sawyer Hess, partner, withdrew merchandise for personal use, $ Memorandum No. 1. 2 3 4 1 5 6
1. Write the date.
4. Write the debit amount.
2. Write the account title.
5. Write the account title.
3. Write the memorandum number.
6. Write the credit amount.
2-1/19

5. LESSON 2-1 Distribution of Net Income and Owners’ Equity Statements
1/16/2019
LESSON 23-2
Distribution of Net Income and Owners’ Equity Statements

6. DISTRIBUTION OF NET INCOME STATEMENT
page 680 1 2 3 4 5 6 7 8
1. Heading
5. Second partner’s share of net income
2. First partner’s name
3. First partner’s share of net income
6. Write Net Income
7. Total net income
4. Second partner’s name
8. Double lines
2-1/19

7. DISTRIBUTION OF NET INCOME STATEMENT WITH UNEQUAL DISTRIBUTION OF EARNINGS
page 681
2-1/19

8. PARTNERS’ CAPITAL AND DRAWING ACCOUNTS
page 682
2-1/19

9. OWNERS’ EQUITY STATEMENT
page 683
1. Heading 1
2. First partner’s name 2
3. First partner’s ending capital 3
4. Second partner’s name 4
5. Second partner’s ending capital 5
6. Total Owners’ Equity 6 7
7. Double lines
2-1/19

10. OWNERS’ EQUITY STATEMENT WITH AN ADDITIONAL INVESTMENT AND A NET LOSS
page 684
2-1/19

11. BALANCE SHEET FOR A PARTNERSHIP
page 684
2-1/19

12. LESSON 2-1 Dissolving a Partnership
1/16/2019
LESSON 23-3
Dissolving a Partnership

13. ACCOUNT BALANCES BEFORE REALIZATION
page 686
2-1/19

14. GAIN ON REALIZATION 1 2 Gain on Realization = Book Value of Asset Sold
page 686
August 1, Received cash from sale of truck, $13,000.00: original cost, $20,000.00; total accumulated depreciation recorded to date, $8, Receipt No. 316.
Gain on Realization =
Book Value of Asset Sold –
Value of Asset Received
$1,000.00
Cash $13,000.00
Cost $20,000.00
Accum. Depr. 8,000.00
Book Value $12,000.00 1 2
1. Calculate the gain.
2. Record the entry.
2-1/19

15. LOSS ON REALIZATION
page 687
August 1. Received cash from sale of supplies, $1,100.00; balance of supplies account, $1, Receipt No. 317.
Loss on Realization =
Book Value of Asset Sold –
Value of Asset Received
$(400.00)
Cash $1,100.00
Supplies $1,500.00 1 2
1. Calculate the loss.
2. Record the entry.
2-1/19

16. LIQUIDATING LIABILITIES
page 688
August 4, Paid cash to all creditors for the amounts owed, $4, Check No. 422.
2-1/19

17. ACCOUNT BALANCES AFTER LIQUIDATION OF NONCASH ASSETS AND PAYMENT OF LIABILITIES
page 688
2-1/19

18. DISTRIBUTING LOSS OR GAIN ON REALIZATION TO PARTNERS
page 689
August 6, Recorded distribution of gain on realization: to Adam Walker, $360.00; to Shirley Jeter, $ Memorandum No. 412.
$360.00
240.00
$600.00 =
60%
40% ×
Walker
Jeter
Total
Share of the Balance of Loss and Gain on Realization
Fixed Percentage
Balance of Loss and Gain on Realization 1
1. Calculate each partner’s share of gain or loss.
2. Record entry to distribute gain or loss. 2
2-1/19

19. DISTRIBUTING REMAINING CASH TO PARTNERS
page 689
August 6. Recorded final distribution of remaining cash to partners: to Adam Walker, $18,360.00; to Shirley Jeter, $12, Check Nos. 423 and 424.
The slides in this tutorial were based a PowerPoint presentation provided by South-Western Century 21 Accounting. The slides were edited and Microsoft Action Script characters were added to help meet the needs of my students.
2-1/19