Revaluation/adjustment in asset is to be recognized upon Dennis admission. Required: How much adjustment in asset should be recorded and what is dennis beginning capital balance.
Revaluation/adjustment in asset is to be recognized upon Dennis admission. Required: How much adjustment in asset should be recorded and what is dennis beginning capital balance.
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 43P
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Question
The following are the capital balances of ABC Partnerships at August 1, 2016:
Albert (40% P&L) $ 220,000
Bernard (40% P&L) 160,000
Conrad (20% P&L) 110,000
Dennis invests $ 270,000 in cash for a 30% ownership interest. The payment goes to the original partners. Revaluation/adjustment in asset is to be recognized upon Dennis admission.
Required:
How much adjustment in asset should be recorded and what is dennis beginning capital balance.
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