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Accounting Problem

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Accounting Problems The post-closing trial balances of two proprietorships on January 1, 2010, are presented below. John Company Calvin Company Dr. Cr. Dr. Cr. Cash $ 10,000 $ 8,000 Accounts receivable 18,000 30,000 Allowance for doubtful accounts $ 2,000 $ 3,000 Merchandise inventory 35,000 20,000 Equipment 60,000 35,000 Accumulated depreciation—equipment 28,000 15,000 Notes payable 20,000 Accounts payable 30,000 40,000 John, Capital 43,000 Calvin, Capital 35,000 $123,000 $123,000 $93,000 $93,000 John and Calvin decide to form a partnership, John-Calvin Company, with the following agreed upon valuations for noncash assets. John Company Calvin Company Accounts receivable $18,000 $30,000 Allowance for doubtful accounts 2,500 4,000 Merchandise inventory 38,000 25,000 Equipment 40,000 22,000 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 John will invest an additional $3,500 in cash, and Calvin will invest an additional $16,000 in cash. Hint: Prepare entries for formation of a partnership and a balance sheet. (SO 2, 4) Instructions (a) Prepare separate journal entries to record the transfer of each proprietorship’s assets and liabilities to the partnership. John, Capital $53,500 Calvin, Capital $41,000 (b) Journalize the additional cash investment by each partner. (c) Prepare a classified balance sheet for the partnership on January 1, 2010. Total assets $204,000 Accounting Assignment Help, Accounting Homework help, Accounting Study Help, Accounting Course Help

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