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TWO SOLE PROPRIETORSHIPS COMBINED TO FORM A PARTNERSHIP NEW SET OF BOOKS OPENED FOR THE...

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Accounting

TWO SOLE PROPRIETORSHIPS COMBINED TO FORM A PARTNERSHIP
NEW SET OF BOOKS OPENED FOR THE PARTNERSHIP
Assume that Carol Cario and Norie Cruz, who are both operating their own boutiques, decid
to combine their resources and form a partnership to be known as Carie Boutique. The trial balanc
of the two businesses as of January 2,2000 are as follows:
Carol Cario
Trial Balance
January 2,2000
Norie Cruz
Trial Balance
January 2,2000
Carol and Norie agreed, among other things, on the following adjustments:
The fair market value of the merchandise inventory of Carol Carino is F950,000.
The equipment owned by Carol Cario has been over-depreciated by 10,000.
Accrued Utilities Payable for Carol Cario and Norie Cruz are 4,000 and 2,500,
respectively.
The merchandise inventory of Norie Cruz is understated by 50,000.
The prepaid insurance account is to be written off.
The allowance for doubtful accounts is to be adjusted to 10% of accounts receivable.
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