When Jovan and Jeanne decided to incorporate their partnership, the trial balance was as follows.
Cash
Accounts receivable(net)
Inventory
Equipment(net)
Accounts payable
Capital: Jovan
Jeanne
Dr
Tshs
Cr
Tshs
8,000,000
22,400,000
36,000,000
47200000
17,200,000
62,400,000
34,000,000
113,600,000
113,600,000
The partnership's books will be closed and the new books will be used for J&J Corporation. The
following additional information is available.
1. The estimated fair values of the assets are:
Accounts receivable
Inventory
Equipment
Tshs
21,600,000
32,800,000
40,000,000
2. All assets and liabilities are transferred to the corporation
3. The common stock is Tshs 10,000 par.Jovan and Jeanne receive a total of 7,100 shares
4. The partners' profit and loss sharing ratio is 60%:40% for Jovan and Jeanne respectively.
Required:
Close the books of the partnership and open J&J Corporation's books of accounts.