Question
Lisa Holler and Chaim Ehrlich operate separate jewelry stores. On January 1, 2019, they decide to...
- Lisa Holler and Chaim Ehrlich operate separate jewelry stores. On January 1, 2019, they decide to combine their separate businesses which were operated as proprietorships to form L & C Jewels, a partnership. Information from their separate balance sheets is presented below:
Lisa Holler Chaim Ehrlich
Cash $10,000 $14,000
Accounts receivable 12,000 10,000
Allowance for doubtful accounts 1,000 500
Accounts payable 5,000 6,000
Notes payable — 3,000
Equipment 12,000 24,000
Accumulated depreciation—equipment 2,000 4,000
It is agreed that the expected realizable value of Lisa’s accounts receivable is $10,000 and Chaim’s receivables is $7,000. The fair value of Lisa’s equipment is $13,000 and the value of Chaim’s equipment is $20,000. It is further agreed that the new partnership will assume all liabilities of the proprietorships.
Instructions
Prepare the journal entries necessary to record the formation of the partnership. Make a separate journal entry for each partner.
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Group of answer choices
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Question 22 pts
On April...
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