On 1 October 2019, Dallas Lucas and Suzanne Foreman formed a partnership. Some business assets and the liabilities of Lucas were assumed by the partnership; these are listed below at both carrying amounts and fair value.

Foreman contributed a building worth $820 000, land worth $350 000, and a $456 000 mortgage was taken over by the partnership. They agreed to share profits and losses in the ratio of 1:2.

During the first year of the partnership, Lucas invested $60 000 in the business and withdrew $45 000. Foreman invested $115 200 and withdrew $17 200. The partnership had a profit of $88 460. Retained Earnings accounts are not used.

Required

(a) Prepare the general journal entries to record the initial investments of both partners (ignore GST).

(b) Prepare a balance sheet as at 1 October 2019.

(c) Prepare a statement of changes in partners’ equity for the year ended 30 September 2020.

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Cash at bank Marketable securities Accounts receivable Inventory Equipment Accounts payable Carrying amount $ 28000 24000 47 000 Fair value $ 28,000 26 800 47 000 122 600 125 400 38 500 230 000 36000 36 000