Formation and allocation of profits - method 1 On 1 October 2019, Dallas Lucas and Suzanne Foreman formed a partnership. Some business assets and the liabilities of Lucas were assumed by the partnership; these are listed below at both carrying amounts and fair value. Carrying amount Fair value Cash at bank $28,000 $28,000 Marketable securities $24,000 $26,800 Accounts receivable $47,000 $47,000 Inventory $122,600 $125,400 36 4 Equipment $38,500 + $230,000 457,200 Accounts payable $36,000 $36,000 Foreman contributed a building worth $820 000, land worth $350 000, and a $456 000 mortgage was taken over by the partnership. They agreed to share profits and losses in the ratio of 1:2. During the first year of the partnership, Lucas invested $60 000 in the business and withdrew $45 000. Foreman invested $115 200 and withdrew $17 200. The partnership had a profit of $88 460. Retained Earnings accounts are not used. Required 1. Prepare the general journal entries to record the initial investments of both partners (ignore GST). 2. Prepare a balance sheet as at 1 October 2019. 3. Prepare a statement of changes in partners' equity for the year ended 30 September 2020. 20,000 30,000 79ooo 56000 138.88460 2