question on accounting

Problem 12-1A (Part Level Submission)The post-closing trial balances of two proprietorships on January 1, 2014, are presented below.  Sorensen Company Lucas Company  Dr. Cr. Dr. Cr.Cash $14,000   $12,000  Accounts receivable 17,500   26,000  Allowance for doubtful accounts   $3,000   $4,400Inventory 26,500   18,400  Equipment 45,000   29,000  Accumulated depreciation—equipment   24,000   11,000Notes payable   18,000   15,000Accounts payable   22,000   31,000Sorensen, capital   36,000    Lucas, capital       24,000  $103,000 $103,000 $85,400 $85,400

Sorensen and Lucas decide to form a partnership, Solu Company, with the following agreed upon valuations for noncash assets.

  Sorensen Company Lucas CompanyAccounts receivable $17,500 $26,000Allowance for doubtful accounts 4,500 4,000Inventory 28,000 20,000Equipment 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) and (b)Your answer is correct.  (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.)No.Account Titles and ExplanationDebitCredit1.        (Transfer of Sorensen's assets and liabilities.)  2.        (Transfer of Lucas' assets and liabilities.)  

(b) 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 ExplanationDebitCredit1.  (To record Sorensen's investment.)  2.  (To record Lucas' investment.)  Click if you would like to Show Work for this question:Open Show Work Show AnswerLink to Text Attempts: 2 of 3 used  (c)Prepare a classified balance sheet for the partnership on January 1, 2014. (List Current Assets in order of liquidity.)SOLU COMPANY

Balance Sheet

January 1, 2014

Assets          $   $   :                              $ Liabilities and Owners’ Equity          $                   $                 $