Terry Oatis operates a small shop that sells fishing equipment. His postclosing trial balance on December 31, 2016, is shown below.
Oatis plans to enter into a partnership with Carmen Thomas, effective January 1, 2017. Profits and losses will be shared equally. Oatis is to transfer all assets and liabilities of his store to the partnership after revaluation as agreed. Thomas will invest cash equal to Oatis's investment after revaluation. The agreed values are Accounts Receivable (net) $14,500; Merchandise Inventory, $49,900; and Furniture and Equipment, $12,300. The partnership will operate as Oatis and Thomas Angler's Outpost.

Instructions
1. In general journal form, prepare the entries to record:
a. The receipt of Oatis's investment of assets and liabilities by the partnership.
b. The receipt of Thomas's investment of cash.
2. Prepare a balance sheet for Oatis and Thomas Angler's Outpost just after the investments.
Analyze: By what net amount were the net assets of Oatis's Tackle Center adjusted before they were transferred to the partnership?

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Oatis Tackle Center Postclosing Trial Balance December 31, 2016 ACCOUNT NAME DEBIT Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise Inventory Furniture and Equipment Accumulated Depreciation Accounts Payable Capital Totals 16400 00 2500 00 45 000 00 29 100 00 23 000 00 4000 00 65 71501 00 95 250 00