On July 1, 20--, Lisa Bush and Wally Dodge combined their two businesses to form a partnership under the firm name of Bush and Dodge. The balance sheets of the two sole proprietorships are shown below.

Bushs Grooming & Pet Supplies

Balance Sheet

June 30, 20 --

1	Assets			Liabilities
2	Cash		$4,600.00	Notes payable	$3,600.00
3	Accounts receivable	$4,200.00		Accounts payable	7,690.00
4	Less allowance for bad debts	480.00	3,720.00	Total liabilities		$11,290.00
5	Merchandise inventory		28,580.00
6	Store equipment	$9,260.00		Owners Equity
7	Less accumulated depreciation	2,400.00	6,860.00	Lisa Bush, capital		32,470.00
8	Total assets		$43,760.00	Total liabilities and owners equity		$43,760.00

Wallys Pet World

Balance Sheet

June 30, 20 --

1	Assets			Liabilities
2	Cash		$3,350.00	Notes payable	$6,000.00
3	Accounts receivable	$4,150.00		Accounts payable	5,500.00
4	Less allowance for bad debts	250.00	3,900.00	Total liabilities		$11,500.00
5	Merchandise inventory		27,240.00
6	Supplies		845.00
7	Office equipment	$8,830.00
8	Less accumulated depreciation	3,400.00	5,430.00
9	Store equipment	$9,175.00		Owners Equity
10	Less accumulated depreciation	4,250.00	4,925.00	Wally Dodge, capital		34,190.00
11	Total assets		$45,690.00	Total liabilities and owners equity		$45,690.00

The balance sheets reflect fair market values except for the following:

(a)	The fair market value of Bushs store equipment is $7,350.
(b)	The fair market values of Dodges office equipment and store equipment are $5,875 and $6,100, respectively.

Required:

Prepare the opening entry for the formation of the Bush and Dodge partnership as of July 1, 20--, using fair market values. The difference between assets invested and liabilities assumed should be credited to each partners capital account. Neither partner has knowledge of any uncollectible accounts receivable.

CHART OF ACCOUNTS

Lisa Bush and Wally Dodge

General Ledger

	ASSETS
101	Cash
122	Accounts Receivable
122.1	Allowance for Bad Debts
131	Merchandise Inventory
142	Supplies
181	Store Equipment
182	Office Equipment
189	Accumulated Depreciation

	LIABILITIES
201	Notes Payable
202	Accounts Payable

	EQUITY
311	Lisa Bush, Capital
312	Lisa Bush, Drawing
321	Wally Dodge, Capital
322	Wally Dodge, Drawing
399	Income Summary

	REVENUE
401	Client Fees
416	Gain on Sale of Assets

	EXPENSES
511	Wages Expense
521	Rent Expense
523	Supplies Expense
533	Utilities Expense
535	Insurance Expense
541	Depreciation Expense
549	Miscellaneous Expense
616	Loss on Sale of Assets

Prepare the opening entry for the formation of the Bush and Dodge partnership as of July 1, 20--, using fair market values. The difference between assets invested and liabilities assumed should be credited to each partners capital account. Neither partner has knowledge of any uncollectible accounts receivable.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

Please follow chart of Accounts. Thank you!