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Kaplan University - ACCT 11612-1A

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Kaplan University - ACCT 11612-1A Problem 12-1A unit 6 AC 116 The post-closing trial balances of two proprietorships on January 1, 2017, are presented below. Sorensen Company Lucas Company Dr ... . Cr. Dr. Cr. Cash $11,000 $9,600 Accounts receivable 14,000 21,000 Allowance for doubtful accounts $2,400 $3,500 Inventory 21,000 14,700 Equipment 36,000 23,000 Accumulated depreciation—equipment 19,200 8,800 Notes payable 14,400 12,000 Accounts payable 17,600 24,800 Sorensen, capital 28,400 Lucas, capital 19,200 $82,000 $82,000 $68,300 $68,300 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 $14,000 $21,000 Allowance for doubtful accounts 3,600 3,200 Inventory 22,400 16,000 Equipment 20,000 12,000 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 $4,000 in cash, and Lucas will invest an additional $15,200 in cash. Prepare separate journal entries to record the transfer of each proprietorship’s assets and liabilities to the partnership. Prepare a classified balance sheet for the partnership on January 1, 2017 SOLU COMPANY Balance Sheet Liabilities and Owners’ Equity [Show More]

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