SERIES A PROBLEMS Woodworth and P 19-6A (LO2) Cr. to Woodworth, Capital: $29,010 CLGL e two sole proprietorships are SHOW ME HOW PARTNERSHIP OPENING ENTRIES On July 1, 20-, Susan Woodwore Barbara Holly combined their two businesses to form a partnership under name of Woodworth and Holly. The balance sheets of the two sole proprietorshi shown below and on the next page. The balance sheets reflect fair market values except for the following: (a) The fair market value of Woodworth's store equipment is $7,500. (b) The fair market values of Holly's office equipment and store equipment are $6,100 and $6,800, respectively. REQUIRED Prepare the opening entry for the formation of the Woodworth and Holly partnershin as of July 1, 20, using fair market values. The difference between assets invested and liabilities assumed should be credited to each partner's capital account. Neither partner has knowledge of any uncollectible accounts receivable. Woodworth's Antiques Balance Sheet June 30, 20- $ 7,100 Liabilities Notes payable Accounts payable Total liabilities $2,500 8.400 $4.500 620 $10,900 Assets Cash Accounts receivable Less allowance for bad debts Merchandise inventory Store equipment Less accumulated depreciation Total assets 3.880 21,430 $8,200 1,300 28410 6,900 Owner's Equity Susan Woodworth, capital Total liabilities and owner's equity $39,310 $39,310 Holly's Unfinished Furniture Balance Sheet June 30, 20- Liabilities $4520 Notes payable Accounts payable 2,800 Total liabilities 28,190 960 $8,000 6,300 $3,275 475 $14,300 Assets Cash Accounts receivable Less allowance for bad debts Merchandise inventory Supplies Office equipment Less accumulated depreciation Store equipment Less accumulated depreciation Total assets 5.600 $7.400 1,800 $7,700 1.500 33.970 6,200 Owner's Equity Barbara Holly, capital Total liabilities and owner's equity 548 270 $48.270 - TINITOTEC