1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 23-1 Forming a Partnership

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 23-1 INITIAL INVESTMENTS BY OWNERS 123 5 page 676 January 1. Received cash from partner, Sawyer Hess, as an initial investment, $15,000.00. 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. 4.Write the debit and credit amounts. 44 1.Write the date. 5.Write the debits to Cash.2.Write the account titles. 3.Write the receipt numbers.

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 23-1 WITHDRAWAL OF CASH BY PARTNER 12345 page 677 January 15. Kendra Sullivan, partner, withdrew cash for personal use, $500.00. Check No. 10. 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.

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 23-1 WITHDRAWAL OF MERCHANDISE BY PARTNER page 678 January 15. Sawyer Hess, partner, withdrew merchandise for personal use, $200.00. Memorandum No. 1. 2. Write the account title. 3. Write the memorandum number. 4. Write the debit amount. 5. Write the account title. 1. Write the date. 6. Write the credit amount. 1 2 34 56

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 23-1 TERMS REVIEW partnership partner partnership agreement page 679

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 23-2 Distribution of Net Income and Owners’ Equity Statements

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 23-1 DISTRIBUTION OF NET INCOME STATEMENT 1 2 3 4 5 6 page 680 1.Heading 4.Second partner’s name 3.First partner’s share of net income 2.First partner’s name 5.Second partner’s share of net income 6.Write Net Income 7.Total net income 8.Double lines 7 8

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 23-1 DISTRIBUTION OF NET INCOME STATEMENT WITH UNEQUAL DISTRIBUTION OF EARNINGS page 681

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 23-1 PARTNERS’ CAPITAL AND DRAWING ACCOUNTS page 682

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 23-1 5.Second partner’s ending capital 3.First partner’s ending capital 2.First partner’s name 6.Total Owners’ Equity 4.Second partner’s name 7.Double lines OWNERS’ EQUITY STATEMENT page 683 1 2 3 4 5 6 1.Heading 7

11. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 LESSON 23-1 OWNERS’ EQUITY STATEMENT WITH AN ADDITIONAL INVESTMENT AND A NET LOSS page 684

12. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 23-1 BALANCE SHEET FOR A PARTNERSHIP page 684

13. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 13 LESSON 23-1 TERMS REVIEW distribution of net income statement owners’ equity statement page 685

14. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 23-3 Dissolving a Partnership

15. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 15 LESSON 23-1 ACCOUNT BALANCES BEFORE REALIZATION page 686

16. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 16 LESSON 23-1 GAIN ON REALIZATION page 686 1.Calculate the gain.2.Record the entry. 2 August 1, 20--. Received cash from sale of truck, $13,000.00: original cost, $20,000.00; total accumulated depreciation recorded to date, $8,000.00. 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

17. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 17 LESSON 23-1 LOSS ON REALIZATION page 687 1.Calculate the loss.2.Record the entry. 2 August 1. Received cash from sale of supplies, $1,100.00; balance of supplies account, $1,500.00. Receipt No. 317. Loss on Realization =Book Value of Asset Sold –Value of Asset Received $(400.00)=–Cash$1,100.00Supplies$1,500.00 1

18. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 18 LESSON 23-1 LIQUIDATING LIABILITIES page 688 August 4, 20--. Paid cash to all creditors for the amounts owed, $4,000.00. Check No. 422.

19. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 19 LESSON 23-1 ACCOUNT BALANCES AFTER LIQUIDATION OF NONCASH ASSETS AND PAYMENT OF LIABILITIES page 688

20. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 20 LESSON 23-1 $360.00 240.00 $600.00 ==== 60% 40% ×××× $600.00 Walker Jeter Total Share of the Balance of Loss and Gain on Realization =Fixed Percentage ×Balance of Loss and Gain on Realization DISTRIBUTING LOSS OR GAIN ON REALIZATION TO PARTNERS page 689 August 6, 20--. Recorded distribution of gain on realization: to Adam Walker, $360.00; to Shirley Jeter, $240.00. Memorandum No. 412. 1.Calculate each partner’s share of gain or loss. 2.Record entry to distribute gain or loss. 2 1

21. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 21 LESSON 23-1 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, $12,740.00. Check Nos. 423 and 424.

22. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 22 LESSON 23-1 TERMS REVIEW liquidation of a partnership realization limited liability partnership (LLP) page 690