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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 $4,400 Inventory 26,500 18,400 Equipment 45,000 29,000 Accumulated depreciation—equipment 24,000 11,000 Notes payable 18,000 15,000 Accounts payable 22,000 31,000 Sorensen, capital 36,000 Lucas, capital 24,000 $103,000 $103,000 $85,400 $85,400 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 $17,500 $26,000 Allowance for doubtful accounts 4,500 4,000 Inventory 28,000 20,000 Equipment 25,000 15,000 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 $5,000 in cash, and Lucas will invest an additional $19,000 in cash. (a) and (b) Your answer is correct. (a) Prepare separate journal entries to record the transfer of each proprietorship’s assets and liabilities to the partnership. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. (Transfer of Sorensen’s assets and liabilities.) 2. (Transfer of Lucas’ assets and liabilities.) (b) Journalize the additional cash investment by each partner. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 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 Answer Link to Text Attempts: 2 of 3 used (c) Prepare a classified balance sheet for the partnership on January 1, 2014. (List Current Assets in order of liquidity.) SOLU COMPANY Balance Sheet January 1, 2014 Assets $ $ : $ Liabilities and Owners’ Equity 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 $4,400 Inventory 26,500 18,400 Equipment 45,000 29,000 Accumulated depreciation—equipment 24,000 11,000 Notes payable 18,000 15,000 Accounts payable 22,000 31,000 Sorensen, capital 36,000 Lucas, capital 24,000 $103,000 $103,000 $85,400 $85,400 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 $17,500 $26,000 Allowance for doubtful accounts 4,500 4,000 Inventory 28,000 20,000 Equipment 25,000 15,000 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 $5,000 in cash, and Lucas will invest an additional $19,000 in cash. (a) and (b) Your answer is correct. (a) Prepare separate journal entries to record the transfer of each proprietorship’s assets and liabilities to the partnership. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) $ $

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
$4,400
Inventory
26,500
18,400
Equipment
45,000
29,000
Accumulated depreciation—equipment
24,000
11,000
Notes payable
18,000
15,000
Accounts payable
22,000
31,000
Sorensen, capital
36,000
Lucas, capital
24,000
$103,000
$103,000
$85,400
$85,400

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 $17,500 $26,000
Allowance for doubtful accounts 4,500 4,000
Inventory 28,000 20,000
Equipment 25,000 15,000

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 $5,000 in cash, and Lucas will invest an additional $19,000 in cash.

(a) and (b)
Your answer is correct.
(a) Prepare separate journal entries to record the transfer of each proprietorship’s assets and liabilities to the partnership. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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