4 0 Required information [The following information applies to the questions dis

Question

4 0 Required information [The following information applies to the questions displayed below.] Part 4 of 7 Debra and Merina sell electronic equipment and supplies through their partnership. They wish to expand their computer lines and decide to admit Wayne to the partnership. Debra's capital is $200,000, Merina's capital is $160,000, and they share income in a ratio of 3:2, respectively. 5.88 points Skipped d. Debra and Merina agree that some of the inventory is obsolete. The inventory account is decreased before Wayne is admitted. Wayne invests $100,000 for a 25 percent interest. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Explanation / Answer

the following are the journal entries:

to record admission of wayne.

working:

wayne invests $100,000 for 25% share,

=> total capital will be after admission of wayne = $100,000 / 25% =>$400,000.

sno accounts debit credit 1 Debra capital a/c ($60,000*3/5) $36,000 Merina capital a/c ($60,000*2/5) $24,000 ...................To Inventory a/c $60,000 to record writedown of inventory

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