The post-closing trial balances of two proprietorships on January 1, 2022, are presented below.

		Sorensen Company				Lucas Company
		Dr.		Cr.		Dr.		Cr.
Cash		$16,000				$13,900
Accounts receivable		20,500				30,000
Allowance for doubtful accounts				$3,500				$5,100
Inventory		30,500				21,300
Equipment		52,000				34,000
Accumulated depreciationequipment				27,800				12,800
Notes payable				20,900				17,400
Accounts payable				25,500				36,000
Sorensen, capital				41,300
Lucas, capital								27,900
		$119,000		$119,000		$99,200		$99,200

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

		Sorensen Company			Lucas Company
Accounts receivable		$20,500			$30,000
Allowance for doubtful accounts		5,200			4,600
Inventory		32,500			23,200
Equipment		29,000			17,400

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

SANDHILL COMPANY Balance Sheet Assets $ $ $ > $ Liabilities and Owners' Equity $ > $