Craig Roberts purchased one-half of Ennis Leighton’s interest in the Vale and Leighton partnership for $34,000. Prior to the investment, land was revalued to a market value of $130,000 from a book value of $80,000. Tony Vale and Ennis Leighton share net income equally. Leighton had a capital balance of $36,000 prior to these transactions.a. Provide the journal entry for the revaluation of land.b. Provide the journal entry to admit Roberts.

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Asked Dec 19, 2019
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Craig Roberts purchased one-half of Ennis Leighton’s interest in the Vale and Leighton partnership for $34,000. Prior to the investment, land was revalued to a market value of $130,000 from a book value of $80,000. Tony Vale and Ennis Leighton share net income equally. Leighton had a capital balance of $36,000 prior to these transactions.
a. Provide the journal entry for the revaluation of land.
b. Provide the journal entry to admit Roberts.

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Expert Answer

Step 1

a.

journal entry for revaluation of Land

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Account Titles and Explanation Debit ($) Credit ($) Date Land 50,000 T's Capital E's Capital (To recordrevaluation of Land.) 25,000 25,000

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Step 2

Working notes:

 

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Working Notes: Revaluation Profit=$130,000-$80,000 = $50,000 Share of T and E is equal K=| $50,000× =$25,000 1 =$25,000 E= $50,000×-

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Step 3

b.

The journal entry to admi...

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Account Titles and Explanation E's Capital Debit ($) Credit ($) Date 30,500 R's Capital 30,500 (To record the journal entry for admission of R.)

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