Question
The post-closing trial balances of two proprietorships on January 1, 2017, are presented below.
Sorensen Company
Lucas Company
Dr.
Cr.
Dr.
Cr.
$11,000
$9,100
13,500
20,000
$2,300
$3,300
20,000
14,000
34,000
22,000
18,200
8,400
13,700
11,400
16,700
23,600
27,600
18,400
$78,500
$78,500
$65,100
$65,100
Sorensen and Lucas decide to form a partnership, Solu Company, with the following agreed upon valuations for noncash assets.
Sorensen Company
Lucas Company
All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships. Further, it is agreed that Sorensen will invest an additional $3,800 in cash, and Lucas will invest an additional $14,400 in cash.
1. )
Prepare separate journal entries to record the transfer of each proprietorship’s assets and liabilities to the partnership
2. Journalize the additional cash investment by each partner.
3. Prepare a classified balance sheet for the partnership on January 1, 2017.
|
|
|
Sorensen Company |
|
Lucas Company |
||||
|
|
|
Dr. |
|
Cr. |
|
Dr. |
|
Cr. |
|
Cash |
|
$11,000 |
|
|
|
$9,100 |
|
|
|
Accounts receivable |
|
13,500 |
|
|
|
20,000 |
|
|
|
Allowance for doubtful accounts |
|
|
|
$2,300 |
|
|
|
$3,300 |
|
Inventory |
|
20,000 |
|
|
|
14,000 |
|
|
|
Equipment |
|
34,000 |
|
|
|
22,000 |
|
|
|
Accumulated depreciation—equipment |
|
|
|
18,200 |
|
|
|
8,400 |
|
Notes payable |
|
|
|
13,700 |
|
|
|
11,400 |
|
Accounts payable |
|
|
|
16,700 |
|
|
|
23,600 |
|
Sorensen, capital |
|
|
|
27,600 |
|
|
|
|
|
Lucas, capital |
|
|
|
|
|
|
|
18,400 |
|
|
|
$78,500 |
|
$78,500 |
|
$65,100 |
|
$65,100 |
