Answer Happy

The post-closing trial balances of two proprietorships on January 1, 2022, are presented below. Sorensen Company Lucas Company Dr. Cr. Dr. Cr. Cash $16,000 $13,400 Accounts receivable 19,500 29,000 Allowance for doubtful accounts $3,400 $4,900 Inventory 29,500 20,600 Equipment 50,000 32,000 Accumulated depreciation-equipment 26,900 12,300 Notes payable 20,200 16,800 Accounts payable 24,600 34,700 Sorensen, capital 39,900 Lucas, capital 26,300 $115,000 $115,000 $95,000 $95,000 Sorensen and Lucas decide to form a partnership, Sunland Company, with the following agreed upon valuations for noncash assets. Sorensen Company Lucas Company Accounts receivable $19,500 $29,000 Allowance for doubtful accounts 5,000 4,500 Inventory 31,400 22,400 Equipment 28,000 16,800 All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships.

(a) Prepare separate journal entries to record the transfer of each proprietorship's assets and liabilities to the partnership. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 > < > > > > (Transfer of Sorensen's assets and liabilities.) Jan. 1 > > < < > < (Transfer of Lucas' assets and liabilities.)

(b) Further, it is agreed that Sorensen will invest an additional $5,600 in cash, and Lucas will invest an additional $21,300 in cash. Journalize the additional cash investment by each partner. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit Jan. 1 > (To record Sorensen's investment.) Jan. 1 < > (To record Lucas' investment.)

(c) Prepare a classified balance sheet for the partnership on January 1, 2022. (List Current Assets in order of liquidity.) SUNLAND COMPANY Balance Sheet Assets $ $ Σ > $ Liabilities and Owners' Equity $ > > $ < > $