Nadia and Adam are sole traders who run their own separate businesses. On 31 December 2019, their individual balance sheets show the following accounts: Nadia Cash Accounts receivable Inventory Equipment Building Land Mortgage loan Capital 500 11500 14500 21500 79000 121500 67000 181500 Adam 35 30 140 230 770 1230 635 1800 Starting in 2020, Nadia and Adam have agreed to form a partnership. The partnership agreement stipulates that all assets and liabilities will be transferred to the partnership. In addition, Nadia and Adam will invest an additional $5000 and $2500 in cash, respectively. Required: Prepare balance sheet for Nadia and Adam's partnership as at 1 January 2020. (List assets in order of liquidity, i.e. in order of them being able to be converted into cash. Enter amounts without $ sign or thousands separators e.a. 45000 not $45 000)
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
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