Musa Moshref and Shaniqua Hollins have operated a successful firm for many years, sharing net income and net losses equally. Taylor Anderson is to be admitted to the partnership on July 1 of the current year, in accordance with the following agreement: a. Assets and liabilities of the old partnership are to be valued at their book values as of June 30, except for the following: • Accounts receivable amounting to $2,500 are to be written off, and the allowance for doubtful accounts is to be increased to 5% of the remaining accounts. • Merchandise inventory is to be valued at $76,600. Equipment is to be valued at $155,700. b. Anderson is to purchase $70,000 of the ownership interest of Hollins for $75,000 cash and to contribute another $45,000 cash to the partnership for a total ownership equity of $115,000. The post-closing trial balance of Moshref and Hollins as of June 30 is as follows:
Musa Moshref and Shaniqua Hollins have operated a successful firm for many years, sharing net income and net losses equally. Taylor Anderson is to be admitted to the partnership on July 1 of the current year, in accordance with the following agreement: a. Assets and liabilities of the old partnership are to be valued at their book values as of June 30, except for the following: • Accounts receivable amounting to $2,500 are to be written off, and the allowance for doubtful accounts is to be increased to 5% of the remaining accounts. • Merchandise inventory is to be valued at $76,600. Equipment is to be valued at $155,700. b. Anderson is to purchase $70,000 of the ownership interest of Hollins for $75,000 cash and to contribute another $45,000 cash to the partnership for a total ownership equity of $115,000. The post-closing trial balance of Moshref and Hollins as of June 30 is as follows:
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter12: Accounting For Partnerships And Limited Liability Companies
Section: Chapter Questions
Problem 4PB
Related questions
Question
100%
could you write down the answer?
Transcribed Image Text:Musa Moshref and Shaniqua Hollins have operated a successful firm for many
years, sharing net income and net losses equally. Taylor Anderson is to be
admitted to the partnership on July 1 of the current year, in accordance with the
following agreement:
a. Assets and liabilities of the old partnership are to be valued at their book
values as of June 30, except for the following:
• Accounts receivable amounting to $2,500 are to be written off, and
the allowance for doubtful accounts is to be increased to 5% of the
remaining accounts.
• Merchandise inventory is to be valued at $76,600.
• Equipment is to be valued at $155,700.
b. Anderson is to purchase $70,000 of the ownership interest of Hollins for
$75,000 cash and to contribute another $45,000 cash to the partnership
for a total ownership equity of $115,000.
The post-closing trial balance of Moshref and Hollins as of June 30 is as follows:
Transcribed Image Text:* 0 1 55%
Balances
Balances
Cash
8,000
Accounts Receivable
42,500
Allowance for Doubtful Accounts
1,600
Merchandise Inventory
72,000
Prepaid Insurance
Equipment
Accumulated Depreciation-Equipment
Accounts Payable
Notes Payable (current)
Musa Moshref, Capital
3,000
180,500
43,100
21,300
35,000
120,000
Shaniqua Hollins, Capital
85,000
306,000
306,000
Instructions
1. Journalize the entries as of June 30 to record the revaluations, using a
temporary account entitled Asset Revaluations. Debits and credits to the asset
revaluations account are losses and gains from revaluation, respectively. The
balance in the accumulated depreciation account is to be eliminated. After
journalizing the revaluations, close the balance of the asset revaluations account
to the capital accounts of Musa Moshref and Shaniqua Hollins.
2. Journalize the additional entries to record Anderson's entrance to the partnership
on July 1, 20Y7.
3. Present a balance sheet for the new partnership as of July 1, 20Y7.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 6 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning