Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 12, Problem 11E
a.
To determine
Record
(b)
To determine
Determine the capital balance of each partner after the admission of the new partner.
(c)
To determine
Explain reason of adjusting tangible assets prior to the admission of new partner.
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Admitting New Partner Who Contributes Assets
After the tangible assets have been adjusted to current market prices, the capital accounts of Brad Paulson and Drew Webster have balances of $87,000 and $148,000,
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Tangible assets should be adjusted to current market prices so that the
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Admitting New Partner Who Contributes Assets
After the tangible assets have been adjusted to current market prices, the capital accounts of Elayne Summers and Murv Newcomb have balances of $116,000 and $197,000, respectively. Rose Clayton is to be
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▼
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Rose Clayton
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c. Why are tangible assets adjusted to current market prices prior to admitting a new partner?
Tangible assets should be adjusted to current market prices so that the new partner
any gains or losses from changes in market prices prior to being admitted. For example,…
Admitting New Partner Who Contributes Assets
After the tangible assets have been adjusted to current market prices, the capital accounts of Elayne Summers and Murv Newcomb have balances of $82,000 and
$131,000, respectively. Rose Clayton is to be admitted to the partnership, contributing $55,000 cash to the partnership, for which she is to receive an ownership
equity of $72,000. All partners share equally in income.
a. Journalize the entry to record the admission of Rose Clayton, who is to receive a bonus of $17,000. If an amount box does not require an entry, leave it blank.
Cash
Elayne Summers, Capital
Murv Newcomb, Capital
Rose Clayton, Capital
Feedback
►Check My Work
b. What are the capital balances of each partner after the admission of the new partner?
Partner
Elayne Summers
Murv Newcomb
Rose Clayton
55,000
$
Balance
94,500 X
$ 143,500 X
30,000 X
Chapter 12 Solutions
Financial Accounting
Ch. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 1PEACh. 12 - Prob. 1PEBCh. 12 - Prob. 2PEACh. 12 - Prob. 2PEBCh. 12 - Prob. 3PEACh. 12 - Prob. 3PEBCh. 12 - Prob. 4PEACh. 12 - Prob. 4PEBCh. 12 - Prob. 5PEACh. 12 - Liquidating partnerships Prior to liquidating...Ch. 12 - Prob. 6PEACh. 12 - Prob. 6PEBCh. 12 - Revenue per employee Niles and Cohen, CPAs earned...Ch. 12 - Prob. 7PEBCh. 12 - Prob. 1ECh. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 16ECh. 12 - Statement of members equity, admitting new member...Ch. 12 - Distribution of cash upon liquidation Hewitt and...Ch. 12 - Distribution of cash upon liquidation David Oliver...Ch. 12 - Liquidating partnershipscapital deficiency Lewis,...Ch. 12 - Prob. 21ECh. 12 - Prob. 22ECh. 12 - Statement of partnership liquidation After closing...Ch. 12 - Prob. 24ECh. 12 - Prob. 25ECh. 12 - Revenue per professional staff The accounting firm...Ch. 12 - Prob. 27ECh. 12 - Prob. 1PACh. 12 - Prob. 2PACh. 12 - Prob. 3PACh. 12 - Prob. 4PACh. 12 - Statement of partnership liquidation After the...Ch. 12 - Prob. 6PACh. 12 - Prob. 1PBCh. 12 - Prob. 2PBCh. 12 - Prob. 3PBCh. 12 - Prob. 4PBCh. 12 - Statement of partnership liquidation After the...Ch. 12 - On August 3, the firm of Chapelle, Rock, and Pryor...Ch. 12 - Prob. 1CPCh. 12 - Prob. 3CPCh. 12 - Prob. 4CP
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