Question
Problem 12-1A The post -closing trial balances of two proprietorships on January 1, 2014, are presented below Sorensen Company Lucas Company Dr Cr Dr Cr
Problem 12-1A
The post -closing trial balances of two proprietorships on January 1, 2014, are presented below
Sorensen Company Lucas Company | ||||
Dr | Cr | Dr | Cr | |
Cash | $14,500 | $11,950 | ||
Account receivable | 17,390 | 26,180 | ||
Allowance for doubtful accounts | $2,900 | $4,620 | ||
Inventory | 26,320 | 17,960 | ||
Equipment | 44,530 | 28,510 | ||
Accumulated depreciation-equipment | 24,350 | 11,400 | ||
Notes payable | 18,130 | 15,110 | ||
Accounts payable | 22,240 | 30,790 | ||
Sorensen, capital | 35,070 | |||
Lucas, capital | 22,680 | |||
Total | $102,690 | $102,690 | $84,600 | $84,600 |
Sorensen and Lucas decide to form a partnership, Solu Companyy, with the following agreed upon valuations dor noncash assets.
Sorensen Company | Lucas Company | |
Accounts receivable | $17,390 | $26,180 |
Allowance for doubtful accounts | 4,990 | 4,050 |
Inventory | 27,830 | 19,580 |
Equipment | 25,130 | 15,930 |
All cash will be transferred tp the partnership, and the partnership will assume all the liabilities of the two proprietorships. Further, it agreed that Sorensen will invest an additional $5,120 in cash, and Lucas will invest an additional $20,870 in cash.
(a) Prepare separate journal entries to record the transfer of each proprietorship's assets and liabilities to the partnership.
(b) Journalize the additional cash investment by each partner.
(c) Prepare a classified balance sheet for the partnership on January 1, 2014
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