Chapter 12, Problem 12.3BPE

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.

Revaluation of assets

Prior to the admission of new partners in the firm, all assets of the firm are stated in the current value or in the adjusted value. Due to revaluation any net increase or decrease in the asset value is treated as revaluation profit and loss respectively. Revaluation profit or loss is shared among the existing partners.

To provide:  The journal entry for revaluation of Equipment.

b.

To determine

To provide: The journal entry to admit L.