Problem 1 Joe Mann and Sam Trane operate separate auto repair shops. On January 1, 2018, they decided to combine their separate businesses which were operated as proprietorships to form M &S Auto Repair, a partnership. Information from their separate balance sheets is presented below: Trane Auto Repair $12,000 $10,000 9,000 1,000 Cash $10,000 500 6,000 3,000 1,500 24,000 4,000 Accounts receivable Allowance for doubtful accounts Accounts payable Notes payable 5,000 Salaries payable Equipment 1,000 12,000 2,000 Accumulated amortization-Equipment It is agreed that the expected realizable value of Mann's accounts receivable is $8,000 and Trane's receivables is $7,000 net of Allowances for Doubtful Accounts. The fair market value of Mann's equipment is $13,000 and the value of Trane's equipment is $20,000. It is further agreed that the new partnership will assume all liabilities of the proprietorships with the exception of the notes payable on Trane's balance sheet which he will pay himself REQUIRED Prepare the journal entries necessary to record the formation of the partnership. Problem 2 ecker and Mader have a partnership agreement which includes the following provisions egarding sharing net income or net loss: 1. A salary allowance of $54,000 to Decker and $36,000 to Mader. 2. An interest allowance of 10% on capital balances at the beginning of the year. 3. The remainder to be divided 60% to Decker and 40% to Mader. e capital balance on January 1, 2018, for Decker and Mader was $90,000 and $120,000, pectively. During 2018, the Decker and Mader Partnership had sales of $495,000, cost of ds sold of $290,000, and operating expenses of $75,000 UIRED are the journal entry to record the distribution of net income to the partners