PROBLEMS SET A presented below laesh LO 1 2 GLS Sorensen Com

PROBLEMS: SET A presented below. laesh (LO 1, 2) GLS Sorensen Company Lucas Company Cash $14,000 $12.000 500 3,00018400 18400 $4,400 29,000 Inventory 26.500 3000 26.000 45,00024,000 Notes payable Accounts payable 11,000 15,000 31,000 18,000 Lucas, capital 24,000 $103,000$103,000 $85,400 $85,400 Sarensens and Lacas decide to form a partnership, Solu Company with the follawing agreed upon valuations for noncash assets. $17,500 4,500 28,000 $26,000 4,000 20,000 Equipment All cash will be transferred to the the liabilities of the two proprietorships. Further, it is agreed that Sorensen will invest an additional $5,000 in cash, and Lucas will invest an additional $19,000 in partnership, and the partnership will assume all and liabilities to the partnership. (b) Je (c) Prepare a classified balance sheet for the partnership on January 1, 2017. Total assets$173,000

Solution

In the Books of Solu Company Date Account Title & Explanation Debit Credit Amount in $ Amount in $ Requirement 1 a Cash 14000 Accounts Receivable 17500 Inventory 26500 Equipement 45000 Accumulated depreication-Equipment 24000 Allowance for doubtful debts 3000 Notes Payable 18000 Accounts Payable 22000 Sorensen\'s Capital 36000 To record the transfer the Sorensen Company\'s asset and liabilities to the partnership. b Cash 12000 Accounts Receivable 26000 Inventory 18400 Equipement 29000 Accumulated depreication-Equipment 11000 Allowance for doubtful debts 4400 Notes Payable 15000 Accounts Payable 31000 Lucas\'s Capital 24000 To record the transfer the Lucas Company\'s asset and liabilities to the partnership. Requirement 2 Cash 5000 Sorensen\'s Capital 5000 Cash 19000 Lucas Capital 19000 To record the additional cash investment by each partner Requirement 3 Classified Balance sheet for the partnership on January 1, 2017 Asset Current asset Cash 50000 Accounts Receivable 43500 Less: Allowance for doubtful debts 7400 36100 Inventory 44900 Non-current asset Equipement 74000 Less : Accumulated depreication-Equipment 35000 39000 Total asset 170000 Liabilities Accounts payable 53000 Notes Payable 33000 Partner\'s capital Sorensen 41000 Lucas 43000 Total Liabilities 170000