The post-closing trial balances of two proprietorships on January 1, 2020, are presented below (amounts in thousands). Bon-Joon and Joon-Ho
The post-closing trial balances of two proprietorships on January 1, 2020, are presented below (amounts in thousands).
Bon-Joon and Joon-Ho decide to form a partnership, BJH Company, with the following agreed upon valuations for non-cash assets.
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 Bon-Joon will invest an additional W5,000 in cash, and Joon-Ho will invest an additional W19,000 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 classified statement of financial position for the partnership on January 1, 2020.
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