According to the terms of the partnership agreement, Cotten’s investment was his business, based upon the following balance sheet which represented the book value of the items:
C. Allen Cotten
Balance Sheet, December 31, 19—
| Assets | |||
| Current Assets: | |||
| Cash | $ 3,065.00 | ||
| Notes Receivable (See Schedule 1) | 2,500.00 | ||
| Accounts Receivable (See Schedule 2) | $25,150.00 | ||
| Less—Reserve for Bad Debts | 600.00 | 24,550.00 | |
| U. S. Liberty Bonds | 3,000.00 | ||
| Accrued Interest | 90.00 | ||
| Merchandise | 21,780.00 | ||
| Deferred Charges to Operation: | |||
| Prepaid Insurance | $ 100.00 | ||
| Office Supplies | 150.00 | ||
| Garage Rent | 75.00 | 325.00 | |
| Fixed Assets: | |||
| Delivery Trucks | $ 5,000.00 | ||
| Less—Depreciation Reserve | 500.00 | 4,500.00 | |
| Total Assets | $59,810.00 | ||
| Liabilities | |||
| Current Liabilities: | |||
| Notes Payable (See Schedule 3) | $ 4,000.00 | ||
| Accounts Payable (See Schedule 4) | 25,600.00 | ||
| Accrued Interest on Notes | 20.00 | ||
| Accrued Taxes | 190.00 | ||
| Total Liabilities | 29,810.00 | ||
| Net Worth | |||
| Represented by: | |||
| C. Allen Cotten, Capital | $30,000.00 | ||
Schedules appended to the balance sheet of C. Allen Cotten:
| Schedule 1. Notes Receivable: | |
| Baird Dry Goods Co. | $ 1,500.00 |
| 60-day 6% note due February 1. | |
| Childs & Son | 1,000.00 |
| Non-interest-bearing note, due February 15. | |
| $ 2,500.00 | |
| Schedule 2. Accounts Receivable: | |
| Atlas Dry Goods Co. | $ 2,283.00 |
| Burrows Dry Goods Co. | 2,000.00 |
| Century Dress Goods Co. | 4,800.00 |
| Falk & Taylor | 3,400.00 |
| Marquis Dress Goods Co. | 2,795.00 |
| T. H. Miller | 1,425.00 |
| National Dress Co. | 2,892.00 |
| Rogers & Son | 3,650.00 |
| Wilson Williams Co. | 1,905.00 |
| $25,150.00 | |
| Schedule 3. Notes Payable: | |
| Marshall Field & Co. | $ 2,000.00 |
| 90-day 6% note due March 1, 19—. | |
| American Dry Goods Co. | 2,000.00 |
| 90-day 6% note due March 15, 19—. | |
| $ 4,000.00 | |
| Schedule 4. Accounts Payable: | |
| Associated Dry Goods Co. | $ 3,950.00 |
| Claflins, Inc. | 6,290.00 |
| Wico Mills, Inc. | 2,780.00 |
| Miller & Rhoades, Inc. | 5,672.00 |
| Newcomb Endicott Co. | 3,678.00 |
| Marshall Field & Co. | 3,230.00 |
| $25,600.00 | |
Cotten guaranteed the collection of all notes and accounts outstanding, and the partnership agreement provided that in case any of the accounts should be judged uncollectible by agreement among the partners or otherwise, such amount is to be charged to Cotten’s personal account on the date such items are found uncollectible.
Wooster’s investment was $20,000 cash, his services and experience; and Woolsey was admitted as a special partner investing $50,000 in cash.