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The post-closing trial balances of two proprietorships on Jan 1, 2020, are presented below

Sorensen company Lucas company

DR CR Dr Cr

Cash $14,000 12,000

Account receivable 17,000 26,000

Allowance for doubtful account 3,0000 4,400

Inventory 26,500 18,400

Equipment 45,000 2,900

Accoumilated depreciation- equipment 24,000 11,000

Notes payable 18,000 15,000

Accounts payable 22,000 31,000

Soresen, capital 36,000

Lucas, capital 24,000

$103,000 $103,000 $85,400 $85,400

Sorensen and Lucas decide to form a partnership, soul company, with the following agreed-upon valuations for noncash assets

Sorensen company Lucas company

Accounts receivable 17,500 26,000

Allowance for doubtful account 4,500 4,000

Inventory 28,000 20,000

Equipment 25,000 15,000

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 Sorensen will invest an additional 5,000 in cash and Lucas will invest an additional 19,000 in cash

a) prepare separate journals entries to record the transfer of each proprietorship's assets and liabilities to the partnership. a. Sorensen, capital $40,000

b) journalize the additional cash investment by each partner Lucas, capital $ 23,000

c) prepare a classified balance sheet for the partnership on Jan 1, 2020 c. Total assets $173,000

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