The trial balances of two proprietorships on January 1, 2014, follow:

Domic and Dasilva decide to form a partnership on January 1 and agree on the following valuations for the noncash assets that they are each contributing:
__________________________________________DomicDasilva
Accounts receivable-net realizable value............$ 9,000..................$21,000
Merchandise inventory....................................14,000....................13,000
Equipment...................................................18,000....................15,000
All of the assets in each of the proprietorships will be transferred to the partnership. The partnership will also assume all the liabilities of the two proprietorships. Domic and Dasilva are also agreed that Dasilva will invest the amount of cash required so their investments in the partnership are equal.
Instructions
(a) Prepare separate journal entries to record the transfer of each proprietorship's assets and liabilities to the partnership on January 1.
(b) Journalize the additional cash investment.
(c) Prepare a balance sheet for the partnership at January 1.
Taking It Further
What are some of the advantages of two individuals such as Domic and Dasilva operating as a partnership instead of as two separate proprietorships?

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Domic Compa Dasilva Com Cr Cr $9,000 13,500 $10,000 24,000 Cash Accounts receivable Allowance for doubtful accounts Merchandise inventory Equipment Accumulated depreciation-equipment Accounts payable I. Domic, capital P. Dasilva, capital 3,000 $ 5,500 11,500 40,000 15,500 31,000 24,000 11,000 36,000 13,000 34,000 28,000 $80,500 $74,000 $74,000 $80,500