The capital balances and profits- and loss-sharing percentages for the Sip, Jog, and Run partnership at December 31, 2016, are as follows: Sip capital (30%) $160,000 Jog capital (50%) $180,000 Run capital (20%) $140,000 The partners agree to admit Wal into the partnership on January 1, 2017, for a 20 percent interest in the capital and income of the business. Required Prepare the journal entry or entries to record Wal’s admission to the partnership assuming that he invests $100,000 in the partnership for the 20 percent interest and that partnership capital is revalued. Assume that the book value of partnership assets equals the fair value. Prepare the journal entry or entries to record Wal’s admission to the partnership assuming that he invests $140,000 in the partnership for the 20 percent interest and that partnership capital is revalued.

The capital balances and profits- and loss-sharing percentages for the Sip, Jog, and Run partnership at December 31, 2016, are as follows: Sip capital (30%) $160,000 Jog capital (50%) $180,000 Run capital (20%) $140,000 The partners agree to admit Wal into the partnership on January 1, 2017, for a 20 percent interest in the capital and income of the business. Required Prepare the journal entry or entries to record Wal’s admission to the partnership assuming that he invests $100,000 in the partnership for the 20 percent interest and that partnership capital is revalued. Assume that the book value of partnership assets equals the fair value. Prepare the journal entry or entries to record Wal’s admission to the partnership assuming that he invests $140,000 in the partnership for the 20 percent interest and that partnership capital is revalued.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...

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Prepare the journal entry or entries to record Wal’s admission to the partnership assuming that he invests $100,000 in the partnership for the 20 percent interest and that partnership capital is revalued. Assume that the book value of partnership assets equals the fair value.
Prepare the journal entry or entries to record Wal’s admission to the partnership assuming that he invests $140,000 in the partnership for the 20 percent interest and that partnership capital is revalued.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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