AB 116 WEEK 6 PROBLEM 12-1A

AB 116 WEEK The post closing trial balances of two proprietorships on January 1 2014 are presented below.
		Sorensen Company		Lucas Company
		Dr.		Cr.		Dr.		Cr.
Cash		$14,120				$12,250		
Accounts receivable		17,050				26,370		
Allowance for doubtful accounts				$3,440				$4,570
Inventory		26,850				18,150		
Equipment		44,950				29,110		
Accumulated depreciation—equipment				24,000				11,080
Notes payable				18,280				15,330
Accounts payable				21,720				31,310
Sorensen, capital				35,530				
Lucas, capital								23,590
		$102,970		$102,970		$85,880		$85,880

Sorensen and Lucas decide to form a partnership, Solu Company, with the following agreed upon valuations for noncash assets.
		Sorensen Company		Lucas Company
Accounts receivable		$17,050		$26,370
Allowance for doubtful accounts		4,150		4,200
Inventory		27,740		20,110
Equipment		25,380		16,190

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 $5,170 in cash, and Lucas will invest an additional $21,230 in cash.
a) Prepare separate journal entries to record the transfer of each proprietorship- assets and liabilities to the partnership. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(b) Journalize the additional cash investment by each partner. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Prepare a classified balance sheet for the partnership on January 1, 2014. (List Current Assets in order of liquidity
a) Prepare separate journal entries to record the transfer of each proprietorship- assets and liabilities to the partnership. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(b) Journalize the additional cash investment by each partner. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Prepare a classified balance sheet for the partnership on January 1, 2014. (List Current Assets in order of liquidity
a) Prepare separate journal entries to record the transfer of each proprietorship- assets and liabilities to the partnership. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(b) Journalize the additional cash investment by each partner. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Prepare a classified balance sheet for the partnership on January 1, 2014. (List Current Assets in order of liquidity