14. The post-closing trial balances of two proprietorships on January 1, 2020, are presentedbelow.Jafar CompanyHisham Company.Debit ($)Credit $)Debit ($)Credit ($)Cash20,00016,000Account receivable36,00060,000Allowance for doubtful debts4,0006,000Merchandise inventory70,00040,000Equipment120,00070,000Accumulated depreciation – equipment56,00030,000Notes Payable40,000Account Payable60,00080,000Jafar, capital86,000Hisham, capital70,000Total ($)246,000246,000186,000186,000Jafar and Hisham decide to form a partnership, Jafar & Hisham Company, with the followingagreed upon valuations for noncash assets.Jafar Co.Hisham Co.Accounts receivable36,00060,000Allowance for doubtful debts5,0008,000Merchandise Inventory76,00050,000Equipment80,00044,000All cash will be transferred to the partnership, and the partnership will assume all theliabilities of the two proprietorships. Further, it is agreed that Jafar will invest an additional$7,000 in cash, and Hisham will invest an additional $32,000 in cash.Required:a) Prepare separate journal entries to record the transfer of each proprietorship's assetsand liabilities to the partnership.b) Journalize the additional cash investment by each partner.c) Prepare a classified balance sheet for the partnership on January 1, 2020.

A journal entry is used to record a business dealings within the accounting records of a business. A…

Answered: 14. The post-closing trial balances of…

Business

Accounting

14. The post-closing trial balances of two proprietorships on January 1, 2020, are presented below.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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