Question

Journalizing withdrawal of cash from partnership Learning Objectives 2, 3 2. Loiselle, Capital $43,100 P-F:12-24A Accounting for partner contributions, allocating profits and losses to the partners, preparing partnership financial statements Loiselle and Randall formed a partnership on March 15, 2024. The partners agreed to contribute equal amounts of capital. Loiselle contributed her sole proprietorship’s assets and liabilities (credit balances in parentheses) as follows: Loiselle’s Business Accounts Receivable Merchandise Inventory Prepaid Expenses Store Equipment, Net Accounts Payable Book Value $ 12,700 44,000 3,200 44,000 (24,000) Current Market Value $ 10,400 30,000 2,700 24,000 (24,000) On March 15, Randall contributed cash in an amount equal to the current market value of Loiselle’s partnership capital. The partners decided that Loiselle will earn 60% of partnership profits because she will manage the business. Randall agreed to accept 40% of the profits. During the period ended December 31, the partnership earned net income of $79,000. Loiselle’s withdrawals were $41,000, and Randall’s withdrawals totaled $29,000. Requirements 1. Journalize the partners’ initial contributions. 2. Prepare the partnership balance sheet immediately after its formation on March 15, 2024. 3. Journalize the closing of the Income

Answer 1

A T-account balance sheet shows a bank's assets, including cash reserves, government bonds, and loans, against its liabilities, such as deposits. The bank's net worth is found by subtracting its liabilities from its assets, resulting in a net worth of $220.

Step-by-step explanation:

The question involves setting up a T-account balance sheet for a bank and calculating the bank's net worth.

Here is how the T-account balance sheet would look based on the information provided:

Assets

Cash Reserves: $50

Government Bonds: $70

Loans: $500

Liabilities

Deposits: $400

To calculate the bank's net worth, we subtract the total liabilities from the total assets. The bank's assets are $620 ($50 in reserves + $70 in government bonds + $500 in loans) and the liabilities are $400 in deposits.

The bank's net worth = Total Assets - Total Liabilities = $620 - $400 = $220.