On March 1, 2014, Eric Keene and Abigail McKee form a partnership. Keene agrees to invest $21,100 in cash and merchandise inventory valued at$55,900. McKee invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $60,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow:

	McKee’s Ledger Balance	Agreed-Upon Valuation
Accounts Receivable	$ 18,900	$ 18,000
Allowance for Doubtful Accounts	1,200	1,500
Equipment	83,500	54,900
Accumulated Depreciation—Equipment	29,800	54,900
Accounts Payable	15,000	15,000
Notes Payable (current)	36,000	36,000

The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of$22,500 (Keene) and $30,400 (McKee), and the remainder equally.

Instructions

Journalize the entries to record the investments of Keene and McKee in the partnership accounts.
Prepare a balance sheet as of March 1, 2014, the date of formation of the partnership of Keene and McKee.
After adjustments and the closing of revenue and expense accounts at February 28, 2015, the end of the first full year of operations, the income summary account has a credit balance of$90,000, and the drawing accounts have debit balances of $28,000 (Keene) and$30,400 (McKee). Journalize the entries to close the income summary account and the drawing accounts at February 28, 2015.

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accounting

Provide an example of a deferred revenue. The adjusting entry associated with a deferred revenue always includes a debit and credit to which account classifications?

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accounting

Give an example of a transaction that creates the described effects for the case below:
Decreases an asset and decreases equity.

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accounting

Both Austin Company and Hill Company had the same unit sales, total costs, and income from operations for the current fiscal year; yet Austin Company had a lower break-even point than Hill Company. Explain the reason for this difference in break-even points.

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