Sole traders agreeing to form a partnership Rajiv and Sharla are sole traders. They have agreed to form a partnership that will start trading on 1 May 2014.

The statements of financial position of each business are shown below.

It was agreed that all the assets and liabilities of each business should be transferred to the new partnership, which would begin trading on 1 May 2014.

Prepare:

a. A journal entry to record Rajiv's contribution to the partnership on 1 May 2014

b. A journal entry to record Sherla's contribution to the partnership on 1 May 2014

c. The opening statement of financial position of the new partnership on 1 May 2014.

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Rajiv Statement of financial position at 30 April 2014 $ Premises 290 000 Fumiture and fittings 38 000 Inventory 29 000 Bank 22 000 379 000 Capital 342 000 Bank loan 25 000 Trade payables 12 000 379 000 Sharla Statement of financial position at 30 April 2014 $ Premises 75 000 Furmniture and fittings 28 000 Inventory 17 000 Trade receivables 9 000 129 000 Capital 104 000 Bank loan 10 000 Bank overdraft 8 000 Trade payables 7 000 129 000