Problem 12-01A a-c (Part Level Submission) (Video)

The post-closing trial balances of two proprietorships on January 1, 2020, are presented below.

Sorensen Company

Lucas Company

Dr.

Cr.

Dr.

Cr.

Cash$12,000

$10,300

Accounts receivable15,000

22,000

Allowance for doubtful accounts$2,600

$3,800

Inventory23,000

15,800

Equipment39,000

25,000

Accumulated depreciationequipment20,600

9,500

Notes payable15,500

12,900

Accounts payable18,900

26,700

Sorensen, capital

31,400

Lucas, capital

20,200

$89,000

$89,000

$73,100

$73,100

Sorensen and Lucas decide to form a partnership, Sheridan Company, with the following agreed upon valuations for noncash assets.

Sorensen Company

Lucas Company

Accounts receivable$15,000$22,000Allowance for doubtful accounts3,9003,400Inventory24,10017,200Equipment21,50012,900

All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships.

(a)

Prepare separate journal entries to record the transfer of each proprietorship's assets and liabilities to the partnership.(Credit account titles are automatically indented when amount is entered. Do not indent manually.)