The post closing trial balances of two proprietorships on

January 1
The post closing trial balances of two proprietorships on January 1

The post-closing trial balances of two proprietorships on January 1, 2017, are presented
below.

Yung and Olde decide to form a partnership, Olde Yung Company, with the following agreed
upon valuations for non-cash assets.
Yung Company Olde Company
Accounts receivable...............................£17,500..........................£26,000
Allowance for doubtful accounts..................2,500.............................4,000
Inventory.............................................28,000...........................20,000
Equipment...........................................25,000...........................18,000
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 Yung will invest an additional £3,000 in cash,
and Olde will invest an additional £16,000 in cash.
Instructions
(a) Prepare separate journal entries to record the transfer of each proprietorship's assets and
liabilities to the partnership.
(b) Journalize the additional cash investment by each partner.
(c) Prepare a statement of fi nancial position for the partnership on January 1, 2017.

The post closing trial balances of two proprietorships on January 1

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