Admitting New Partner With Bonus L. Bowers and V. Lipscomb are partners in Elega
ID: 2538750 • Letter: A
Question
Admitting New Partner With Bonus L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and LUpscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $7,000. The capital balances of each partner are $75,500 and $105,000, respectively, prior to the revaluation. a. Provide the journal entry for the asset revaluation. For a compound transaction, Iif an amount box does not require an entry, leave it blank L. Bowers, Capital V. L M. Ortiz, Capital b. Provide the journal entry for Ortiz's admission under the following independent situations: 1. Ortiz purchased a 20% interest for $38,000. For a compound transaction, if an amount box does not require an entry, leave it blank. 2. Ortiz purchased a 30% interest for $95,000. For a compound transaction, if an amount box does not require an entry. leave it blank Check My Work 3 more Check My Work uses remaining. PreviousNext All work saved. Save and Exit Submit Assignment for Grading 1 F6 F9 10Explanation / Answer
Date
Accounts and explanations
Debit ($)
Credit ($)
L Bower's capital
3500
V Lipscomb's capital
3500
M. Ortiz's capital
7000
(Being the new partner's capital account adjusted against the old partner's capital account)
b. 1:
L Bower's capital
19000
V Lipscomb's capital
19000
M. Ortiz's capital
38000
(Being the new partner admitted by adjusting the capital account)
b. 2:
L Bower's capital
47500
V Lipscomb's capital
47500
M. Ortiz's capital
95000
(Being the new partner admitted by adjusting the capital account)
The amount of cash on hand
Credit balances of capital:
Lewis
38400
122900
Zapata
84500
122900
Less: Fowler's negative capital
24600
Cash on hand
98300
Date
Accounts and explanations
Debit ($)
Credit ($)
Bank
24600
Fowler's capital account
24600
(Being the cash received from fowler’s for his negative capital)
This transaction must take place in order to repay the other two partner’s their due. If the above cash is received from Fowler then the next transaction will be as follows to repay the outstanding capital account
Lewis' capital
38400
Zapata’s capital
84500
Bank
122900
(Being the outstanding capital balances repaid)
Date
Accounts and explanations
Debit ($)
Credit ($)
L Bower's capital
3500
V Lipscomb's capital
3500
M. Ortiz's capital
7000
(Being the new partner's capital account adjusted against the old partner's capital account)
b. 1:
L Bower's capital
19000
V Lipscomb's capital
19000
M. Ortiz's capital
38000
(Being the new partner admitted by adjusting the capital account)
b. 2:
L Bower's capital
47500
V Lipscomb's capital
47500
M. Ortiz's capital
95000
(Being the new partner admitted by adjusting the capital account)
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