The post-closing trial balances of two proprietorships on January 1, 2022, are presented below. Cash Accounts receivable Allowance for doubtful accounts Inventory Equipment Accumulated depreciation-equipment Notes payable Accounts payable Sorensen, capital Sorensen, capital Lucas, capital Accounts receivable Allowance for doubtful accounts Inventory $111,500 Equipment $19,000 Sorensen Company 4,900 30,200 Dr. 27,000 $15,000 19,000 28,500 49,000 39,200 Cr. $28,000 $3,200 4,300 25,900 Sorensen Company Lucas Company 21,600 16,200 19,400 23,800 39,200 25,500 $111,500 $91,900 $91,900 Sorensen and Lucas decide to form a partnership, Pharoah Company, with the following agreed upon valuations for noncash assets... Lucas Company Dr. $13,000 28,000 19,900 31,000 Cr. $4,800 11,900 16,200 33,500 All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships.
The post-closing trial balances of two proprietorships on January 1, 2022, are presented below. Cash Accounts receivable Allowance for doubtful accounts Inventory Equipment Accumulated depreciation-equipment Notes payable Accounts payable Sorensen, capital Sorensen, capital Lucas, capital Accounts receivable Allowance for doubtful accounts Inventory $111,500 Equipment $19,000 Sorensen Company 4,900 30,200 Dr. 27,000 $15,000 19,000 28,500 49,000 39,200 Cr. $28,000 $3,200 4,300 25,900 Sorensen Company Lucas Company 21,600 16,200 19,400 23,800 39,200 25,500 $111,500 $91,900 $91,900 Sorensen and Lucas decide to form a partnership, Pharoah Company, with the following agreed upon valuations for noncash assets... Lucas Company Dr. $13,000 28,000 19,900 31,000 Cr. $4,800 11,900 16,200 33,500 All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:The post-closing trial balances of two proprietorships on January 1, 2022, are presented below.
Cash
Accounts receivable
Allowance for doubtful accounts
Inventory
Equipment.
Accumulated depreciation-equipment.
Notes payable
Accounts payable
Sorensen, capital
Sorensen, capital
Lucas, capital
Accounts receivable
Allowance for doubtful accounts
$111,500
Inventory
Equipment
$19,000
4,900
Sorensen Company
30,200
27,000
Dr.
$15,000
Sorensen Company
19,000
28,500
49,000
39,200
$28,000
Cr.
4,300
$3,200
21,600
25,900
16,200
19,400
23,800
Lucas Company
39,200
Sorensen and Lucas decide to form a partnership, Pharoah Company, with the following agreed upon valuations for noncash assets.
$111,500 $91,900 $91,900
Lucas Company
$13,000
Dr.
28,000
19,900
25,500
31,000
Cr.
$4,800
11,900
16,200
33,500
All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships.
Transcribed Image Text:(c).
Prepare a classified balance sheet for the partnership on January 1, 2022. (List Current Assets in order of liquidity.)
PHAROAH COMPANY
Balance Sheet
Assets
LA
Liabilities and Owners' Equity
LA
$
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