Partnership It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio. Forming a Partnership While forming the partnership, the contribution of assets by partners are debited to the partnership assets account; whereas the liabilities of the partnerships are credited to the partnership’s liabilities account, and the net amount of the investments of partners are credited to the partners’ individual capital account. To record: The journal entry for the asset revaluation.

Question

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 $8,000. The capital balances of each partner are $93,000 and $130,500, 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, Cap ✔ 4,000 ✓ V. Lipscomb, Cal ✓4,000 ✓ Equipmen Feedback ►Check My Work b. Provide the journal entry for Ortiz's admission under the following independent situations: 1. Ortiz purchased a 20% interest for $47,000. If an amount box does not require an entry, leave it blank. Cash ✓ 47,000 ✓ L. Bowers, Cap ✓ V. Lipscomb, Cal ✔ M. Ortiz, Capi✓ ✓ Feedback Check My Work 8,000✔ ✓ 52,500✔ 2. Ortiz purchased a 30% interest for $118,000. If an amount box does not require an entry, leave it blank. Cash ✔ 118,000 ✓ L.…

Answer 1

Question

Chapter 12, Problem 12.14EX

a.

To determine

Partnership

It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

Forming a Partnership

While forming the partnership, the contribution of assets by partners are debited to the partnership assets account; whereas the liabilities of the partnerships are credited to the partnership’s liabilities account, and the net amount of the investments of partners are credited to the partners’ individual capital account.

To record: The journal entry for the asset revaluation.

b. 1

To determine

To provide: The journal entry

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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 $8,000. The capital balances of each partner are $93,000 and $130,500, 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, Cap ✔ 4,000 ✓ V. Lipscomb, Cal ✓4,000 ✓ Equipmen Feedback ►Check My Work b. Provide the journal entry for Ortiz's admission under the following independent situations: 1. Ortiz purchased a 20% interest for $47,000. If an amount box does not require an entry, leave it blank. Cash ✓ 47,000 ✓ L. Bowers, Cap ✓ V. Lipscomb, Cal ✔ M. Ortiz, Capi✓ ✓ Feedback Check My Work 8,000✔ ✓ 52,500✔ 2. Ortiz purchased a 30% interest for $118,000. If an amount box does not require an entry, leave it blank. Cash ✔ 118,000 ✓ L.…

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.…

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