The partnership of Wildhorse, Sheffield, and Tamarisk engaged you to adjust its accounting records and convert them uniformly to the accrual basis in anticipation of admitting Kerns as a new partner. Some accounts are on the accrual basis and some are on the cash basis. The partnership's books were closed at December 31, 2024, by the bookkeeper, who prepared the general ledger trial balance that appears as follows: Wildhorse, Sheffield, and Tamarisk General Ledger Trial Balance December 31, 2024 Debit Credit Cash $13,700 Accounts Receivable 38,000 Inventory 32,000 Land 9,900 Buildings 52,800 Allowance for Depreciation of Buildings $6,500 Equipment 54,800 Allowance for Depreciation of Equipment 5,400 0 Goodwill 5,000 Accounts Pavable 50.700 Allowance for Depreciation of Buildings Equipment Allowance for Depreciation of Equipment Goodwill Accounts Payable Allowance for Future Inventory Losses Wildhorse, Capital Sheffield, Capital Tamarisk, Capital Totals $6,500 54,800 5,400 5,000 50,700 7,800 36,600 64,100 35,100 $206,200 $206,200 Your inquiries disclose the following: 1. The partnership was organized on January 1, 2023. No provision was made in the partnership agreement for the allocation of partnership profits and losses. During 2023, profits were allocated equally among the partners. The partnership agreement was amended, effective January 1, 2024, to provide for the following profit and loss ratio: Wildhorse, 40% ; Sheffield, 40%; and Tamarisk, 20%. The amended partnership agreement also stated that the accounting records were to be maintained on the accrual basis and that any adjustments necessary for 2023 should be allocated according to the 2023 profit allocation agreement. Q Search 2. The following amounts were not recorded as prepayments or accruals. December 31 2024 2023 Prepaid insurance $700 $900 Advances from customers 1,000 1,400 Accrued interest expense 500 The advances from customers were recorded as sales in the year the cash was received. 3. 4. 5. In 2024, the partnership recorded a provision of $7,800 for anticipated declines in inventory prices. You convinced the partners that the provision was unnecessary and should be removed from the books. The partnership charged equipment purchased for $3,900 on January 1, 2024, to expense. This equipment has an-estimated life of 10 years and an estimated salvage value of $500. The partnership depreciates its capitalized equipment using the declining balance method at twice the straight-line depreciation rate. The partners agreed to establish an allowance for doubtful accounts at 2% of current accounts receivable and 5% of past-due accounts. At December 31, 2023, the partnership had $53,000 of accounts receivable, of which only $4,400 was past due. At December 31, 2024, 20% of accounts receivable was past due, of which $4,400 represented sales made in 2023 and was considered collectible. The partnership had written off uncollectible accounts in the year the accounts became worthless as follows: Accounts Written Off In 2024 2023 2024 accounts $800 2023 accounts 1,000 $200 6. Goodwill was recorded on the books in 2024 and credited to the partners' capital accounts in the profit and loss ratio in recognition of an increase in the value of the business resulting from improved sales volume. The partners agreed to write off the goodwill before admitting the new partner. Prepare a worksheet showing the adjustments and the adjusted trial balance for the partnership on the accrual basis at December 31. 2024. All adjustments affecting income should be made directly to partners' capital accounts. Supporting computations should be in good form. (Do not prepare formal financial statements or formal journal entries.) (Round answers to O decimal places, eg. 5,125.) Wildhorse, Sheffield, and Tamaris Adjusted Trial Balanc December 31, 2024 Unadjusted Ralance question 3 of 3 < > > > Dr. Unadjusted Balance Wildhorse, Sheffield, and Tamaris Adjusted Trial Balance December 31, 2024 Cr. Dr estion 3 of 3 < A > M 14 Accounts Payable Accounts Receivable Accrued Interest Expense Advances from Customers Allowance for Depreciation of Buildings Allowance for Depreciation of Equipment Allowance for Doubtful Accounts Allowance for Future Inventory Losses Buildings Cash Equipment Goodwill Income Summary Insurance Expense Interest Payable Inventory Investments Land Wildhorse, Capital Dr. Unadjusted Balance Cr. Adjusted Trial Balanc December 31, 2024 SA Dr Question 3 of 3 < > Buildings Cash Equipment Goodwill Income Summary Insurance Expense Interest Payable Inventory Investments Land Wildhorse. Capital Sheffield, Capital Tamarisk, Capital Prepaid Insurance Unrealized Gain on Revaluation of Building Unrealized Gain on Revaluation of Inventory Unrealized Gain on Revaluation of Land Unrealized Loss on Revaluation of Building Unrealized Loss on Revaluation of Inventory Unrealized Loss on Revaluation of Land Dr. Unadjusted Balance Cr. Adjusted Trial Balanc December 31, 2024 Dr Question 3 of 3 < > > > > Search a