ch12 - Exercise Set C - Chapter 12 PROBLEMS: SET C P12-1C...

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PROBLEMS: SET C P12-1C The post-closing trial balances of two proprietorships on January 1, 2011, are pre- sented below. Spirit Company Trust Company Dr. Cr. Dr. Cr. Cash $ 9,500 $ 6,000 Accounts receivable 15,000 23,000 Allowance for doubtful accounts $ 2,500 $ 4,000 Merchandise inventory 28,000 17,000 Equipment 50,000 30,000 Accumulated depreciation—equipment 24,000 13,000 Notes payable 25,000 Accounts payable 20,000 37,000 Free, Capital 31,000 Will, Capital 22,000 $102,500 $102,500 $76,000 $76,000 Spirit and Trust decide to form a partnership, Spirit- Trust Company, with the following agreed upon valuations for noncash assets. Spirit Company Trust Company Accounts receivable $15,000 $23,000 Allowance for doubtful accounts 3,500 5,000 Merchandise inventory 32,000 21,000 Equipment 28,000 18,000 All cash will be transferred to the partnership, and the partnership will assume all the liabilities of the two proprietorships. Further, it is agreed that Spirit will invest an additional $3,000 in cash, and Trust will invest an additional $13,000 in cash. Instructions (a) Prepare separate journal entries to record the transfer of each proprietorship’s assets and li- abilities to the partnership. (b) Journalize the additional cash investment by each partner. (c) Prepare a balance sheet for the partnership on January 1, 2010. P12-2C At the end of its first year of operations on December 31, 2010, the LAX Company’s accounts show the following. Partner
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This note was uploaded on 09/19/2010 for the course ACCT 220 taught by Professor Ullmann during the Fall '10 term at University of Nebraska Kearney.

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ch12 - Exercise Set C - Chapter 12 PROBLEMS: SET C P12-1C...

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