Admitting New Partner With Bonus L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and Lipscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $11,000. The capital balances of each partner are $94,500 and $131,500, respectively, prior to the revaluation. a. Provide the journal entry for the asset revaluation. If an amount box does not require an entry, leave it blank. L. Bowers, Capital V. Lipscomb, Capital Equipment Feedback V ✔ Cash ✓ Check My Work a Adjust the equipment and adjust each partner's equity account in their income-sharing ratio 5,500 ✔ 5,500 ✔ b. Provide the journal entry for Ortiz's admission under the following independent situations: 1. Ortiz purchased a 20% interest for $46,000. If an amount box does not require an entry, leave 46,000 ✓ L. Bowers, Capital V. Lipscomb, Capital M. Ortiz, Capital ✓ ✓ 11,000 ✓ 1,500 X 1.500 X 43.000 X blank.
Admitting New Partner With Bonus L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and Lipscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $11,000. The capital balances of each partner are $94,500 and $131,500, respectively, prior to the revaluation. a. Provide the journal entry for the asset revaluation. If an amount box does not require an entry, leave it blank. L. Bowers, Capital V. Lipscomb, Capital Equipment Feedback V ✔ Cash ✓ Check My Work a Adjust the equipment and adjust each partner's equity account in their income-sharing ratio 5,500 ✔ 5,500 ✔ b. Provide the journal entry for Ortiz's admission under the following independent situations: 1. Ortiz purchased a 20% interest for $46,000. If an amount box does not require an entry, leave 46,000 ✓ L. Bowers, Capital V. Lipscomb, Capital M. Ortiz, Capital ✓ ✓ 11,000 ✓ 1,500 X 1.500 X 43.000 X blank.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Question
Transcribed Image Text:Admitting New Partner With Bonus
L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and Lipscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued
downward by $11,000. The capital balances of each partner are $94,500 and $131,500, respectively, prior to the revaluation.
a. Provide the journal entry for the asset revaluation. If an amount box does not require an entry, leave it blank.
L. Bowers, Capital
V. Lipscomb, Capital
Equipment
Feedback
✓
L. Bowers, Capital
V. Lipscomb, Capital
M. Ortiz, Capital
5,500
Feedback
5,500
Check My Work
a. Adjust the equipment and adjust each partner's equity account in their income-sharing ratio
11,000
b. Provide the journal entry for Ortiz's admission under the following independent situations:
1. Ortiz purchased a 20% interest for $46,000. If an amount box does not require an entry, leave it blank.
Cash
menem
46,000
1,500 X
1,500 X
43,000 X
Check My Work
b.1. Determine the total capital, including the new contribution. Calculate the new partner's share of the total capital. If the new partner's contribution exceeds his share of the capital, the bonus goes to the existing partners. If the
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