Question: 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
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$12,000
$10,300
Accounts receivable15,000
22,000
Allowance for doubtful accounts$2,600
$3,800
Inventory23,000
15,800
Equipment39,000
25,000
Accumulated depreciationequipment20,600
9,500
Notes payable15,500
12,900
Accounts payable18,900
26,700
Sorensen, capital
31,400
Lucas, capital
20,200
$89,000
$89,000
$73,100
$73,100
Sorensen and Lucas decide to form a partnership, Sheridan Company, with the following agreed upon valuations for noncash assets.
Sorensen Company
Lucas Company
Accounts receivable$15,000$22,000Allowance for doubtful accounts3,9003,400Inventory24,10017,200Equipment21,50012,900
All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships.
(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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