Two sole proprietors L and M agreed to form a partnership on January 31, 20x4. The trial balance for each proprietor is shown below as of January 1, 20x4 L Cash Account receivable, net Merchandise inventory Building, net Furniture and fixtures, net Accounts payable Mortgage payable L, Capital M, Capital BOOK VALUE 40,000.00 60,000.00 L FAIR VALUE 40,000.00 52,000.00 M BOOK VALUE 30,000.00 70,000.00 M FAIR VALUE 30,000.00 56,000.00 100,000.00 94,000.00 100,000.00 114,000.00 280,000.00 320,000.00 250,000.00 280,000.00 60,000.00 64,000.00 40,000.00 44,000.00 110,000.00 110,000.00 80,000.00 80.000.00 150,000.00 150,000.00 200,000.00 200,000.00 230,000.00 260,000.00 The L and M partnership will take over the assets an assume the liabilities of the proprietors as of January 1, 20x4 REQUIRED: A. Determine the following items after formation of the partnership. (1) Total assets, (2) Total liabilities, and (3) Total capital

Two sole proprietors L and M agreed to form a partnership on January 31, 20x4. The trial balance for each proprietor is shown below as of January 1, 20x4 L Cash Account receivable, net Merchandise inventory Building, net Furniture and fixtures, net Accounts payable Mortgage payable L, Capital M, Capital BOOK VALUE 40,000.00 60,000.00 L FAIR VALUE 40,000.00 52,000.00 M BOOK VALUE 30,000.00 70,000.00 M FAIR VALUE 30,000.00 56,000.00 100,000.00 94,000.00 100,000.00 114,000.00 280,000.00 320,000.00 250,000.00 280,000.00 60,000.00 64,000.00 40,000.00 44,000.00 110,000.00 110,000.00 80,000.00 80.000.00 150,000.00 150,000.00 200,000.00 200,000.00 230,000.00 260,000.00 The L and M partnership will take over the assets an assume the liabilities of the proprietors as of January 1, 20x4 REQUIRED: A. Determine the following items after formation of the partnership. (1) Total assets, (2) Total liabilities, and (3) Total capital

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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Question

Two sole proprietors L and M agreed to form a partnership on January 31, 20x4. The trial balance
for each proprietor is shown below as of January 1, 20x4
L
Cash
Account receivable, net
Merchandise inventory
Building, net
Furniture and fixtures, net
Accounts payable
Mortgage payable
BOOK
VALUE
L, Capital
M, Capital
L
FAIR
VALUE
40,000.00
52,000.00
M
BOOK
VALUE
M
40,000.00
60,000.00
100,000.00 94,000.00
100,000.00 114,000.00
280,000.00 320,000.00 250,000.00 280,000.00
60,000.00 64,000.00
40,000.00
44,000.00
110,000.00 110,000.00
200,000.00 200,000.00
230,000.00
80,000.00 80.000.00
150,000.00 150,000.00
260,000.00
The L and M partnership will take over the assets an assume the liabilities of the proprietors as of
January 1, 20x4
FAIR
VALUE
30,000.00
30,000.00
70,000.00 56,000.00
REQUIRED:
A. Determine the following items after formation of the partnership. (1) Total assets, (2) Total
liabilities, and (3) Total capital

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