By Group – 5 Rajeshwari Komal (60030) Suruchi Agrawal (60041) Surabhi Priya (60039) Kumar Ankit (60018) Kumar Devashish (60019) Kumar Rohit (60021) Xytech Inc. Submitted by Group-5
In this case, there is a company named Xytech Inc. which has been started by three partners named Able, Baker and Cabot. Their product designs were very successful and led to rapid growth of the company resulting in more need of capital to extend the growth and size of the company. In this case, major financing transactions entered into by the company for the first 10 years of its incorporation were taken into consideration. Here,…show more content… The journal entry for the loan is, 2001 April.26 Assets and Current Liabilities…dr 50,000 To Loans payable, Cabot a/c 50,000
In October, Baker surrendered his ownership in the firm and sold it out equally to Able and Cabot. Thus the journal entry is, Oct.1 Bakers, Capital…dr 82,000 To Able, Capital a/c 41,000 To Cabot, Capital a/c 41,000 This year, the firm had made net income of $12,000 which was distributed equally between the partner Able and Cabot as Baker has already left the partnership. The journal entries for this is, Dec.31 Income Summary…dr 12,000 To Able, Capital a/c 6,000 To Cabot, Capital a/c 6,000 In the year 2002, the firm got incorporated which gave it a right to issue shares
