Jenny and Margaret agree to form a partnership on 16 September 2020 to supply first-aid kits to motor vehicle dealers. They agree on the following market values given to them by an independent valuer.
• Jenny’s contribution:
– Cash $10 000
– Inventory $18 000
– Accounts receivable $7500 (less allowance for doubtful debts $1250)
– Computer table $1200

• Margaret’s contribution:
– Cash $20 000
– Inventory $2000
– Accrued expenses $800
(a) Prepare the initial statement of financial position for Jenny and Margaret’s partnership as at 16 September 2020.
(b) What would happen to the statement of financial position if, over the following four weeks, Jenny and Margaret made a cash profit of $14 000?