Craig Roberts purchased one-half of Ennis Leighton’s interest in the Vale and Leighton partnership for $32,400. Prior to the investment, land was revalued to a market value of $161,870 from a book value of $86,860. Tony Vale and Ennis Leighton share net income equally. Leighton had a capital balance of $29,370 prior to these transactions. Required: A. On December 31, provide the journal entry for the revaluation of land.* B. On December 31, provide the journal entry to admit Roberts.*
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.
| Required: | |||
| A. | On December 31, provide the |
||
| B. | On December 31, provide the journal entry to admit Roberts.*
|
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
