Problem 12-4A Admitting New Partner Tosio Kato and Angela Gordon have operated a
ID: 2502612 • Letter: P
Question
Problem 12-4A
Admitting New Partner
Tosio Kato and Angela Gordon have operated a successful firm for many years, sharing net income and net losses equally. Tricia McCay is to be admitted to the partnership on May 1 of the current year, in accordance with the following agreement:
Instructions:
1. Journalize the entries as of April 30 to record the revaluations, using a temporary account entitled Asset Revaluations. The balance in the accumulated depreciation account is to be eliminated. After journalizing the revaluations, close the balance of the asset revaluations account to the capital accounts of Tosio Kato and Angela Gordon.
For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
2. Journalize the additional entries to record McCay's entrance to the partnership on May 1, 2012.
3. Present a balance sheet for the new partnership as of May 1, 2012.
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1. Journalize the entries as of April 30 to record the revaluations, using a temporary account entitled Asset Revaluations. The balance in the accumulated depreciation account is to be eliminated. After journalizing the revaluations, close the balance of the asset revaluations account to the capital accounts of Tosio Kato and Angela Gordon.
For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
2. Journalize the additional entries to record McCay's entrance to the partnership on May 1, 2012.
3. Present a balance sheet for the new partnership as of May 1, 2012.
Tosio Kato and Angela Gordon have operated a successful firm for many years, sharing net income and net losses equally. Tricia McCay is to be admitted to the partnership on May 1 of the current year, in accordance with the following agreement: Assets and liabilities of the old partnership are to be valued at their book values as of April 30, except for the following: 2.McCay is to purchase $60,000 of the ownership interest of Gordon for $65,000 cash and to contribute another $35,000 cash to the partnership for a total ownership equity of $95,000.Explanation / Answer
Tosio Kato and Angela Gordon have operated a successful firm for many years, sharing net income and net losses equally. Tricia McCay is to be admitted to the partnership on May 1 of the current year, in accordance with the following agreement:
The post-closing trial balance of Kato and Gordon as of April 30 is as follows: