Two sole proprietors,L and M,agreed to form a partnership on January 1,2009.The trial balance for each proprietorship is shown below as of January 1,2009.
The LM partnership will take over the assets and assume the liabilities of the proprietors as of January 1,2009.
Required:
a)Prepare a balance sheet,for financial accounting purposes,for the LM partnership as of January 1,2009.
b)In addition,assume that M agreed to recognize the goodwill generated by L's business.Accordingly,M agreed to recognize an amount for L's goodwill such that L's capital equaled M's capital on January 1,2009.Given this alternative,how does the balance sheet prepared for requirement A change?
Definitions:
Development Stages
Distinct phases in a process of growth or evolution, each characterized by specific features or achievements, often used in reference to biological, psychological, or sociocultural development.
Leadership
The act of guiding or influencing a group towards achieving its goals through direction and motivation.
Groups
Collections of individuals who come together to achieve a common goal or share a common interest.
Teams
Groups of people working together towards a common goal.
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