Jawaid and Junaid are sole traders, were carrying on competing business. On March 1,1997,

they decided to form a partnership under the name of JJ corporation by merging their

business.

On that date their balance sheet items were as follows:-

Jawaid Junaid

Cash 7,000 10,500

Accounts receivable 35,000 42,000

Merchandise inventory 28,000 17,500

Office furniture 52,500 42,000

Allowance for depreciation-Office furniture 28,000 14,000

Allowance for bad debts 4,000 5,000

Accounts payable 24,000 27,000

The following valuations were agreed upon:-

(1) Jawaid's accounts receivable were estimated to realize Rs.30,000 and his office furniture

was valued at Rs.40,000

(2) Junaid's accounts receivable were estimatedto realize Rs.38,000 and his office furniture

was valued at Rs.9,000

REQUIRED

(a) Give enteries in the General Journal of the firm to record the investment by Jawaid & Junaid .

(b) Prepare initial balance sheet of the firm.