BBA BUS 400202 PRINCIPLES OF FINANCIAL ACCOUNTING 2 (20% WEIGHTING) WINTER, 2019-20 Carefully consider the post-closing trial balances of two proprietorships on January 1, 2017 S Company L Company Dr. 12,000 26,000 3,000 4,400 18,400 29,000 Cash 14,000 Accounts Receivable 17,500 Allowances for doubtful debts Inventory 26,500 Equipment 45,000 Accumulated Depreciation (Equipment) Notes Payable Accounts Payable S Capital L Capital 24,000 18,000 22,000 36,000 11,000 15,000 31,000 24,000 103,000 103,000 85400 85,400 S&L decide to form a partnership. Smart Partners, with the following agreed upon valuations for non-cash assets. Accounts Receivable Allowance for doubtful accounts Inventory Equipment S Company $17,500 4,500 28,000 25,000 L Company $26,000 4,000 20,000 15,000 All cash will be transferred to the partnership and the partnership will assume all the liabilities of the two proprietorships. Further, it is agreed that s will invest an additional $5,000 in cash and L will invest an additional $19,000 in cash You are required to carry out the following tasks. I Prepare separate journal entries to record the transfer of each proprietorship's assets and liabilities to the partnership. Il Journalize the additional cash investments by each partner. III Prepare a classified balance sheet for the partnership on January 1, 2017. IV Discuss the differences between Sole-Proprietorship and Partnership V Critically comment on the contributions of each partners to the new Partnership