ACCT7002 GROUP ASSIGNMENT STUDENT F22 1 .xlsx - Group...

ACCT7002 DO NOT USE GREEN CELLS
Group Members:
Group Assignment
Richard Rogers operated a successful proprietorship called, Richard's Parts Plus, through which he sold electric
Richard also did some custom installations for customers on a contract basis. He employed several people, but
Janurary 1, 2022 he partnered with his long time friend, John Jones,who offered a substantial capital investme
In addition to expanding the sales of electrical parts, Richard also wanted to eventually start selling electrical a
division of the company. Richard accepted John's offer and the two men had another friend, who was a lawye
The partner's agreed to share profit and loss in the ratio of 40% (Richard) to 60% (John)
The new company was named R&J Electrical Supply.
Below is the balance sheet of Richard's proprietorship on December 31, 2021, the year end date of his propriet
An independent appraiser determined that approximately
$ 1,200
of Richard's Accou
had market value of
A
with an expected useful life of 5 years after which it wo
Richard's Parts Plus
Balance Sheet
As at December 31, 2021
Assets Liabilities
Cash $92,500 Accounts Payable
Accounts Receivable 17,200
Unearned Revenue
Note Receivable
(Note 1) 30,000 Bank Loan
Prepaid Insurance
1,200
Prepaid Rent
(Note 2) 3,600 Total Liabilities
Inventory 125,000
Equipment 150,000 Owner's Equity
Accumulated Depreciation -24,000 R.Rogers, Capital
Total Assets $395,500 Liabilities & Owne
Notes:
Note 1 -
The note represents amount loaned to an employee for 1 year dated Dec.31, 2021.
Interest was charged at 12% and due with principle on Jan.1, 2023
Note 2 -
Amount represents rent for Jan. 2022
Note 3 -
Represents amounts received during December 2021 for services to be rendered for custom i
Note 4 -
The note represents amount borrowed from another company for the purchase of equipment
Repaid in equal instalments plus interest at 5% over the next 5 years, first payment due Jan.1
2022 Operations:
On January 2, 2022, John C of John's cash investment was used to purchase a parc
to store their inventory plus a product display showroom and an office. The appraised valu
for the building which has an estimated 50 year useful life and $ 50,000 residual value.
Given the above, the land was debited for D and the building account was debite
They immediately had an addition put onto the building to allow them to have a showroom to sell appliances.
Residual would now be $75,000 with a 50 year useful life. The partners decided to adop
the first year, only half of the regular amount of depreciation was taken on all assets. For example on the Build
Note Payable

as follows: 575,000-75,000/50 x 1/2 = $5,000. The same should be done for the equipment
The partners' estimated that approximately 2% of sales would be returned for repair or replacement. The bu
The Unadjusted Trial Balance as well as information for the adjustments is presented in the excel workbook ta
2023
Incorporation of the partnership
The business enjoyed a very successful first year of operations and as such the two men decided that in order t
paid on profits made by the business, and to expand operations further, they needed to incorporate the partne
They then contacted their lawyer friend again to do the legal work necessary to transfer their ownership in the
operating under the same name, R&J Electrical Supply.