Dexter Thomas and Herman Walker, attorneys, operate a law practice. They would like to expand the expertise of their firm. In anticipation of this, they have agreed to admit Jewell Lorenzo to the partnership on January 1, 20X1. The capital account balances c January 1, 20X1, after revaluation of assets, are Thomas, $179,000, and Walker, $139,000. Net income or net loss is shared equally. Required: Prepare the entries in general journal form to record the admission of Lorenzo to the partnership on January 1, 20X1, under each of t following independent conditions: 1. Thomas sells one-half of his interest in the partnership to Lorenzo for $127,000 cash. 2. Thomas sells one-half of his interest in the partnership to Lorenzo for $83,000 cash. 3. Lorenzo invests $119,000 in the business for a 25 percent interest in the partnership. 4. Lorenzo invests $123,000 in the business for a 30 percent interest in the partnership. Analyze: Assume that Lorenzo invests $119,000 in the business for a 25 percent interest in the partnership. What percentage of total equity does each partner own?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question
Dexter Thomas and Herman Walker, attorneys, operate a law practice. They would like to expand the expertise of their firm. In
anticipation of this, they have agreed to admit Jewell Lorenzo to the partnership on January 1, 20X1. The capital account balances on
January 1, 20X1, after revaluation of assets, are Thomas, $179,000, and Walker, $139,000. Net income or net loss is shared equally.
Required:
Prepare the entries in general journal form to record the admission of Lorenzo to the partnership on January 1, 20X1, under each of the
following independent conditions:
1. Thomas sells one-half of his interest in the partnership to Lorenzo for $127,000 cash.
2. Thomas sells one-half of his interest in the partnership to Lorenzo for $83,000 cash.
3. Lorenzo invests $119,000 in the business for a 25 percent interest in the partnership.
4. Lorenzo invests $123,000 in the business for a 30 percent interest in the partnership.
Analyze:
Assume that Lorenzo invests $119,000 in the business for a 25 percent interest in the partnership. What percentage of total equity
does each partner own?
Complete this question by entering your answer in the tabs below.
General
11111
Analyze
Transcribed Image Text:Dexter Thomas and Herman Walker, attorneys, operate a law practice. They would like to expand the expertise of their firm. In anticipation of this, they have agreed to admit Jewell Lorenzo to the partnership on January 1, 20X1. The capital account balances on January 1, 20X1, after revaluation of assets, are Thomas, $179,000, and Walker, $139,000. Net income or net loss is shared equally. Required: Prepare the entries in general journal form to record the admission of Lorenzo to the partnership on January 1, 20X1, under each of the following independent conditions: 1. Thomas sells one-half of his interest in the partnership to Lorenzo for $127,000 cash. 2. Thomas sells one-half of his interest in the partnership to Lorenzo for $83,000 cash. 3. Lorenzo invests $119,000 in the business for a 25 percent interest in the partnership. 4. Lorenzo invests $123,000 in the business for a 30 percent interest in the partnership. Analyze: Assume that Lorenzo invests $119,000 in the business for a 25 percent interest in the partnership. What percentage of total equity does each partner own? Complete this question by entering your answer in the tabs below. General 11111 Analyze
Expert Solution
steps

Step by step

Solved in 6 steps

Blurred answer
Knowledge Booster
Partnership Accounting
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education