The post-closing trial balances of two proprietorships on January 1,2022, are presented below.Sorensen CompanyLucas CompanyDr.Cr.Dr.Cr.Cash$17,000$14,400Accounts receivable21,00031,000Allowance for doubtful accounts$3,600$5,300Inventory32,00022,100Equipment54,00035,000Accumulated depreciation-equipment28,80013,200Notes payable21,60018,000Accounts payable26,40037,200Sorensen, capital43,600Lucas, capital28,800$124.000$124,000 $102,500 $102.500Sorensen and Lucas decide to form a partnership, Blossom Company, with the following agreed upon valuations for noncash assets.Sorensen and Lucas decide to form a partnership, Blossom Company, with the following agreed upon valuations for noncash assets.SorensenLucasCompanyCompanyAccounts receivable$21,000$31.000Allowance for doubtful accounts5,4004,800Inventory33,60024,000Equipment30,00018,000All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships.(a)Your AnswerCorrect AnswerYour answer is partially correct.Prepare separate journal entries to record the transfer of each proprietorship's assets and liabilities to the partnership. (Creditaccount titles are automatically indented when amount is entered. Do not indent manually.)CraditPrepare separate journal entries to record the transfer of each proprietorship's assets and liabilities to the partnership. (Creditaccount titles are automatically indented when amount is entered. Do not indent manually.)Date Account Titles and ExplanationDebitCreditJan. 1Cash17,000Accounts Receivable21,000Equipment30,000Inventory33.600Allowance for Doubtful Accounts5,400Accounts Payable26,400Notes Payable21,600Sorensen, Capital48.200(Transfer of Sorensen's assets and liabilities.)Jan. 1Cash14,400Accounts Receivable31,000 Further, it is agreed that Sorensen will invest an additional $6,000 in cash, and Lucas will invest an additional $22,800 in cash.Journalize the additional cash investment by each partner. (Credit account titles are automatically indented when amount isentered. Do not indent manually.)No.Account Titles and ExplanationDebitCreditJan. 1Cash6,000Sorensen, Capital6,000(To record Sorensen's investment.)Jan 1Cash22.800Lucas, Capital22,800(To record Lucas' investment.)Prepare a classified balance sheet for the partnership on January 1, 2022. (List Current Assets in order of liquidity.)BLOSSOM COMPANYBalance SheetAssetsLiabilities and Owners' Equity%24%24

The question is based on the concept of financial accounting.

The post-closing trial balances of two proprietorships on January 1,2022, are presented below. Sorensen Company Lucas Company Dr. Cr. Dr. Cr. Cash $17,000 $14,400 Accounts receivable 21,000 31,000 Allowance for doubtful accounts $3,600 $5,300

The post-closing trial balances of two proprietorships on January 1,2022, are presented below. Sorensen Company Lucas Company Dr. Cr. Dr. Cr. Cash $17,000 $14,400 Accounts receivable 21,000 31,000 Allowance for doubtful accounts $3,600 $5,300

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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