Project Description:

here is the problem i'm having problems with.

the post-closing trial balances of two proprietorships on january 1, 2012, are
presented below.
high and lowe decide to form a partnership, high lowe company, with the following
agreed upon valuations for noncash assets.
high company lowe company
dr. cr. dr. cr.
cash $ 14,000 $13,000
accounts receivable 17,500 26,000
allowance for doubtful accounts $ 3,000 $ 4,400
merchandise inventory 26,500 18,400
equipment 45,000 28,000
accumulated depreciation—equipment 24,000 12,000
notes payable 20,000 15,000
accounts payable 20,000 31,000
high, capital 36,000
lowe, capital 23,000
$103,000 $103,000 $85,400 $85,400
high company lowe company
accounts receivable $17,500 $26,000
allowance for doubtful accounts 4,500 4,000
merchandise inventory 30,000 20,000
equipment 25,000 18,000
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 high will invest $3,000 in
cash, and lowe will invest $18,000 in cash.
(a) prepare separate journal entries to record the transfer of each proprietorship’s assets
and liabilities to the partnership.
(b) journalize the additional cash investment by each partner.
(c) prepare a balance sheet for the partnership on january 1, 2012.
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Price Type: Negotiable

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