Question

Admitting New Partner Brian Caldwell and Adriana Estrada have operated a successful firm for many years, sharing net income and net losses equally. Kris Mays is to be admitted to the partnership on September 1 of the current year, in accordance with the following agreement: a. Assets and liabilities of the old partnership are to be valued at their book values as of August 31, except for the following: 1. Accounts receivable amounting to $2,200 are to be written off, and the allowance for doubtful accounts is to be increased to 5% of the remaining accounts. 2. Merchandise inventory is to be valued at $59,300. 3. Equipment is to be valued at $137,100. b. Mays is to purchase $56,000 of the ownership interest of Estrada for $61,000 cash and to contribute another $30,000 cash to the partnership for a total ownership equity of $86,000. The post-closing trial balance of Caldwell and Estrada as of August 31 is as follows:

Answer 1

reauirementia Journal entries to record mays's entrance to the Partnership on reptember 1,2019 Date sep-1 Account title and eaplanation Debit($) coedit (&) Adriana Estrada capital Alc. 56.000 pris mays capital 56,000 sepi 30,000 cash Alc kris mays Capital 30.000

Partner's eauity Brian Caldwell capital 98,400 Adriana Estrada capitel 31,400 Kris Mays, Capital (56.000-80 pa) 86.600 Total Parther's capital 2,15,800 2,66, 600 warring Note: 0 ♡ Brian Caldwell capital = 84,000+ 14,400 = $98.400 * Adriana Estrade capital = 73.000+ 14.400 - 56,000 - $31,400
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