On December 31, 2014 Grace and Rita agreed to form a partnership named GR Company. Shown below are the balances of their accounts: The partners agreed to make the following valuation of their contributions: Grace: a. Account receivable should have a net realizable value of 160,000 . b. Merchandise should be valued at 220,000 . c. Expired portion of prepaid insurance is 5,000 . d. Equipment should have a net book value of 80,000 . e. An accrued expense is 10,000 . Rita: a. Account receivable should have a net realizable value of 230,000 . b. Merchandise should be valued at 200,000 . c. Expired portion of prepaid insurance is 8,000 . d. Equipment should have a net book value of 150,000 . e. An accrued expense is 10,000 . Required 1. Compute the capital account balance of Grace and Rita prior to partnership formation. 2. Adjusting entries on the books of Grace and Rita. 3. Journal entries to record the formation of partnership. 4. Prepare a Statement of Financial Position of the partnership. On December 31, 2014 Grace and Rita agreed to form a partnership named GR Company. Shown below are the balances of their accounts: The partners agreed to make the following valuation of their contributions: Grace: a. Account receivable should have a net realizable value of 160,000 . b. Merchandise should be valued at 220,000 . c. Expired portion of prepaid insurance is 5,000 . d. Equipment should have a net book value of 80,000 . e. An accrued expense is 10,000 . Rita: a. Account receivable should have a net realizable value of 230,000 . b. Merchandise should be valued at 200,000 . c. Expired portion of prepaid insurance is 8,000 . d. Equipment should have a net book value of 150,000 . e. An accrued expense is 10,000 . Required 1. Compute the capital account balance of Grace and Rita prior to partnership formation. 2. Adjusting entries on the books of Grace and Rita. 3. Journal entries to record the formation of partnership. 4. Prepare a Statement of Financial Position of the partnership