Problem 12-1A (Part Level Submission)<\/b>The post-closing trial balances of two proprietorships on January 1, 2014, are presented below.
\nSorensen Company<\/b>
\nLucas Company<\/b>
\nDr.<\/b>
\nCr.<\/b>
\nDr.<\/b>
\nCr.<\/b>Cash $14,000 $12,000 Accounts receivable 17,500 26,000 Allowance for doubtful accounts $3,000 $4,400Inventory 26,500 18,400 Equipment 45,000 29,000 Accumulated depreciation\u2014equipment 24,000 11,000Notes payable 18,000 15,000Accounts payable 22,000 31,000Sorensen, capital 36,000 Lucas, capital 24,000 $103,000 $103,000 $85,400 $85,400<\/p>\n
Sorensen and Lucas decide to form a partnership, Solu Company, with the following agreed upon valuations for noncash assets.<\/p>\n
\nSorensen Company<\/b>
\nLucas Company<\/b>Accounts receivable $17,500 $26,000Allowance for doubtful accounts 4,500 4,000Inventory 28,000 20,000Equipment 25,000 15,000<\/p>\n
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 $5,000 in cash, and Lucas will invest an additional $19,000 in cash.<\/p>\n
\n(a) and (b)<\/b>Your answer is correct. (a) Prepare separate journal entries to record the transfer of each proprietorship\u2019s assets and liabilities to the partnership.
\n(Credit account titles are automatically indented when amount is entered. Do not indent manually.)<\/b>
\nNo.<\/b>
\nAccount Titles and Explanation<\/b>
\nDebit<\/b>
\nCredit<\/b>1. (Transfer of Sorensen’s assets and liabilities.) 2. (Transfer of Lucas’ assets and liabilities.) <\/p>\n
(b) Journalize the additional cash investment by each partner. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)<\/b><\/p>\n
No.<\/b>
\nAccount Titles and Explanation<\/b>
\nDebit<\/b>
\nCredit<\/b>1. (To record Sorensen’s investment.) 2. (To record Lucas’ investment.) Click if you would like to Show Work for this question:Open Show Work Show AnswerLink to Text
\n Attempts: 2 of 3 used <\/b>
\n(c)<\/b>Prepare a classified balance sheet for the partnership on January 1, 2014.
\n(List Current Assets in order of liquidity.)<\/b>
\nSOLU COMPANY<\/b><\/p>\n
Balance Sheet<\/p>\n
January 1, 2014<\/p>\n
Assets<\/b> $ $ : $
\nLiabilities and Owners\u2019 Equity<\/b> $ $ $<\/p>\n","protected":false},"excerpt":{"rendered":"
Problem 12-1A (Part Level Submission)The post-closing trial balances of two proprietorships on January 1, 2014, are presented below. Sorensen Company Lucas Company Dr. Cr. Dr. Cr.Cash $14,000 $12,000 Accounts receivable 17,500 26,000 Allowance for doubtful accounts $3,000 $4,400Inventory 26,500 18,400 Equipment 45,000 29,000 Accumulated depreciation\u2014equipment 24,000 11,000Notes payable 18,000 15,000Accounts payable 22,000 31,000Sorensen, capital 36,000 Lucas, capital 24,000 $103,000 $103,000 $85,400 $85,400 Sorensen and Lucas decide to Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-49164","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/49164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=49164"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/49164\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=49164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=49164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=49164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}