“Two sole proprietors, L and M, agreed to form a partnership on January 1, 2013. The trial balance for each proprietorship is shown below as of January 1, 2013. Click the link at the bottom of the page to access a spreadsheet containing information from both proprietors.The LM partnership will take over the assets and assume the liabilities of the proprietors as of January 1, 2013.Discuss the following:The steps required to form the partnershipPrepare and post the financials for LM Partnership and discuss the differences that you have with your colleaguesAfter Wednesday, consider the following: Assume that M agreed to recognize the goodwill generated by Ls business. Accordingly, M agreed to recognize an amount for Ls goodwill such that Ls capital equaled Ms capital on January 1, 2013. Given this alternative, how does the balance sheet prepared for #1 change?

Proprietors

Assets, Liabilities &
Equities
L
M

Cash
$40,000
$25,000

AR
$15,000
$10,000

Inventory
$105,000
$15,000

Land
$60,000
$10,000

Plant and Equipment
$400,000
$30,000

Less: Accumulated Depreciation
-$150,000
-$5,000

Goodwill
$10,000

Patent
$0
$0

Total Assets
$480,000
$85,000

AP
$50,000
$15,000

Loan-L
$100,000

Owners Equity
$270,000
$70,000

Total Liabilities & Equity
$420,000
$85,000

Two sole proprietors, L and M, agreed to form a partnership on January 1, 2013. The trial balance for each proprietorship is shown below as of January 1, 2013. Click the link at the bottom of the page to access a spreadsheet containing information from both proprietors.The LM partnership will take over the assets and assume the liabilities of the proprietors as of January 1, 2013.Discuss the following:”