Unger and Madison--Partnership Journal Entries
Unger and Madison go into partnership together. The agreement specifies
that the two partners will split all profits and losses equally. See transactions for June below.
Cash 101   Note Payable 201   Unger Drawing 302 Unger Capital 301
           
           
       
  Accts Payable 202   Madison Drawing 304 Madison Capital 303
Accts Receivable 104          
           
     
    Rent Expense 501 Service Revenue 401
Equipment 108          
           
       
Acc. Depr. Equip. 110     Utilities Expense 503 Income Summary 600
           
         
Building 112        
      Depreciation Exp. 509  
       
Acc. Depr. Bldg. 114        
             
    Hints on entries:
    DEBIT CREDIT
Enter the following transactions in the accounts. Then, using your pencil, post to T-accounts.
1. Unger invested $35,000 cash in the partnership, plus Equipment with fair market 101 & 108 301
value of $15,000.
2. Madison invested $40,000 cash in the business, as well as a building with fair market 101 & 112 303
value of $100,000.
3. Service Revenue was earned on account, $68,000. 104 401
4. Rent Expense was paid in cash, $2000 501 101
5. Utilities Expense was incurred for $40,000; half of it was paid in cash, the rest on account. 503 101 & 202
6. Record depreciation on Building of $3,000; depreciation on Equipment = $1,000. 509 & 509 110 & 114
7. Close Service Revenue to Income Summary. 401 600
8. Close all Expenses to Income Summary 600 501/503/509
9. Close Income Summary to the owner's capital accounts; each owner gets 1/2 of net income. 600 301 & 303
10. Unger withdrew $2,000 and Madison withdrew $1,000. 302/304 101
Prepare the Income Statement, Partners' Capital statement and Balance Sheet in spreadsheet--here's the format:
IS Partners' Capital Unger Madison Totals
Service Revenue $ Beginning Capital $ $ $
Rent Exp. $ +Net Income $ $ $
Utilities Exp. $ Subtotal $ $ $
Depreciation Exp. $ $ Minus Drawings $ $ $
Net Income $ Ending Capital $ $ $
BS
Cash $ Accts Payable $
Accts Receivable $
Equipment $ Unger Capital $
-Accum. Depreciation $ $ Madison Capital $
Building $
-Accum. Depreciation $ $
Total Assets $ Total Liab. & OE $
Send or share your Financial Statements (not the T-accounts) with moneil03@seattlecentral.edu