Reference no: EM132637102

Espanol operated a speciality shop that sold fishing equipment and accessories. Her post-closing trial balance on Decemebr 31, 2015 is as follows:

                                                 Fish
                                            post-closing Trial Balance
                                                      December 31, 2015                          

                                                        debit                            credit
cash                                          36,000
accounts receivable                     150,000
allowance for doubtful accounts                                   16,000
inventory                                440,000
equipment                              135,000
accumulated depreciation                                         75,000
accounts payable                                                     30,000
Espanol, Capital                                                       640,000

                                                761,000                    761,000

• Espanol plans to enter into contract of partnership with trusted associate, Quino, effective Jan. 1, 2016. Profits and losses will be shared equally. Espanol is to transfer all the assets and liabilities of her shop to the partnership after revaluation.

• Quino will invest cash equal to Espanol's investment after valuation. The agreed values are as follows- accounts receivables(net), 140,000; inventory, 460,000; and equipment (net), 124,000. The partnership will operate under the business name of R'Us.

Required:

Question 1: Prepare the opening Journal entries in the books of the partnership.

Question 2: Prepare the partnership's statement of financial position as at the date of formation of the partnership.