Problem 12-01A a-c (Part Level Submission) (Video)

The post-closing trial balances of two proprietorships on January 1, 2020, 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 depreciationequipment				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.

(b)

Further, it is agreed that Sorensen will invest an additional $5,000 in cash, and Lucas will invest an additional $19,000 in cash. 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
Jan. 1	select an account title to record Sorensen's investment on January 1 Notes Payable Accounts Payable Lucas, Capital Equipment Accumulated Depreciation - Equipment Inventory Cash Accounts Receivable Allowance for Doubtful Accounts Sorensen, Capital	enter a debit amount	enter a credit amount
	select an account title to record Sorensen's investment on January 1 Accumulated Depreciation - Equipment Allowance for Doubtful Accounts Notes Payable Equipment Cash Inventory Accounts Receivable Accounts Payable Sorensen, Capital Lucas, Capital	enter a debit amount	enter a credit amount
	(To record Sorensen's investment.)
Jan. 1	select an account title to record Lucas' investment on January 1 Lucas, Capital Equipment Allowance for Doubtful Accounts Notes Payable Cash Accounts Payable Inventory Sorensen, Capital Accounts Receivable Accumulated Depreciation - Equipment	enter a debit amount	enter a credit amount
	select an account title to record Lucas' investment on January 1 Inventory Allowance for Doubtful Accounts Lucas, Capital Equipment Notes Payable Accumulated Depreciation - Equipment Sorensen, Capital Accounts Payable Cash Accounts Receivable	enter a debit amount	enter a credit amount
	(To record Lucas' investment.)