Two sole proprietors,L and M,agreed to form a partnership on January 1,20X9.The trial balance for each proprietorship is shown below as of January 1,20X9.
The LM partnership will take over the assets and assume the liabilities of the proprietors as of January 1,20X9.
Required:
a)Prepare a balance sheet,for financial accounting purposes,for the LM partnership as of January 1,20X9.
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 1,20X9.Given this alternative,how does the balance sheet prepared for requirement A change?
Definitions:
Product Line Extensions
Adding new products to an existing product line in order to compete more broadly in the industry.
Revamped Product
A product that has been significantly modified or updated with new features, design, or packaging to improve its appeal or functionality.
Product Life Cycle
The stages a product goes through from introduction to growth, maturity, and decline in the market.
Product Price
The amount of money required to purchase a product, determined by factors like cost of production, market demand, and competition.
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