Prepare the partnership balance sheet at december

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Preparing partnership financial statements

On December 31, 2012, Dana Davis and Lou Ghai agree to combine their proprietorships into a partnership. Their balance sheets on December 31 are shown as follows.


Davis's Business

Ghai's Business


Book Value

Current Market Value

Book Value

Current Market Value

Assets





Cash

$9,000

$9,000

$6,000

$6,000

Accounts receivable

26,000

24,000

16,000

14,000

Inventory

49,000

43,000

38,000

38,000

Plant assets (net)

123,000

105,000

54,000

58,000

Total assets

$207,000

$181,000

$114,000

$116,000

Liabilities and Owners' Equity





Accounts payable

$24,000

$24,000

$12,000

$12,000

Accrued expenses payable

12,000

12,000



Notes payable

55,000

55,000



Davis, capital

116,000

?



Ghai, capital



102,000

?

Total liabilities and owners' equity

$207,000

$181,000

$114,000

116,000

Requirements

1. Journalize the contributions of Davis and Ghai to the partnership.

2. Prepare the partnership balance sheet at December 31, 2012.

Reference no: EM13527476

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