1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kipiarov [429]
2 years ago
6

L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and Lipscomb share income equally. M. Ortiz will be

admitted to the partnership. Prior to the admission, equipment was revalued downward by $8,000. The capital balances of each partner are $96,000 and $40,000, respectively, prior to the revaluation.
a. Provide the journal entry for the asset revaluation.
b. Provide the journal entry for Ortiz’s admission under the following independent situations:
1. Ortiz purchased a 20% interest for $20,000.
2. Ortiz purchased a 30% interest for $60,000.
Business
1 answer:
Mama L [17]2 years ago
5 0

Answer: See attachment and explanation

Explanation:

1. Ortiz purchased a 20% interest for $20,000.

Total capital after the admission of the partner will be:

= ($96000 - $4000) + ($40000 - $4000) + $20000

= $92000 + $36000 + $20000

= $148000

The share of new partner in the capital structure will be:

= Total capital × Interest of new partner

= $148000 × 20%

= $29600

There'll be a deficiency in the profit which the existing partner contributes to and this will be:

= $29600 - $20000

= $9600

Then each partner shares =$9600/2 = $4800

2. Ortiz purchased a 30% interest for $60,000.

Total capital after the admission of the partner will be:

= ($96000 - $4000) + ($40000 - $4000) + $60000

= $92000 + $36000 + $60000

= $188000

The share of new partner in the capital structure will be:

= Total capital × Interest of new partner

= $188000 × 30%

= $56400

Since the share is less than the amount of $60000 bought in, the existing partner will be compensated in the amount of ($60000 - $56400) = $3600. Therefore each partner gets $3600/2 = $1800

Check attachment for the journal entries.

You might be interested in
Which of the following is an example of sustainable farming
Reil [10]
I think its B.

Sustainable farming focuses on producing long-term crops and livestock, while also having minimal effects on the environment.
7 0
3 years ago
On June 1, Norma Company signed a 12-month lease for warehouse space. The lease requires monthly rent of $550, with 4 months pai
Sati [7]

Answer:

Balance = $1,650

Explanation:

As Norma company has paid 4 months rent in advance, therefore at the end of June, norma company will record its 1-month expense as follows

Adjusting entry at the end of June would be

                             DEBIT       CREDIT

Entry

Rent Expense     $550

Prepaid Rent                         $550

The balance on Norma's prepaid expense would be

Prepaid Rent  = $2200

Rent Expense = ($550)

Balance = $1,650

7 0
3 years ago
What is price elastic of supply
Reika [66]
The price elasticity of supply is a measure used in economics to show the responsiveness, or elasticity, of the quantity supplied of a good or service to a change in its price.
4 0
3 years ago
The most competitively effective and very likely most profitable long-term approach to reducing or eliminating the impact of pay
monitta

Build and equip a production facility in Europe-Africa and then expand it as may be needed to supply all ( or at least most) of the pairs the company intends to try to sell in Europe-Africa is the most competitively effective and very likely most profitable long-term approach to reduce or eliminate the impact of paying tariffs imported to a company's distribution warehouse in Europe-Africa.

Tariffs are taxes imposed by one country on goods or services imported from another country. Tariffs are trade limitations that raise prices and decrease available quantities of goods and services for U. S. businesses and customers.

A “unit” or specific tariff is a tax levied as a fixed charge for each unit of a good that is imported – for instance, $300 per ton of imported steel. An “ad valorem” tariff is levied as a proportion of the value of imported goods. An example is a 20 percent tariff on imported automobiles.

Learn more about Tariffs here brainly.com/question/8000501

#SPJ4

3 0
1 year ago
If i went through my employee files to determine what type of person makes the best employee, i would probably be conducting:
weeeeeb [17]
The best person on the files
8 0
3 years ago
Other questions:
  • g Closser Corporation produces and sells two products. In the most recent month, Product M50S had sales of $43,000 and variable
    15·1 answer
  • The De Beers Company, one of the longest-lived monopolies, is facing increasing competition. One source of competition comes fro
    6·1 answer
  • Thrillville has $39.5 million in bonds payable. One of the contractual agreements in the bond is that the debt to equity ratio c
    12·1 answer
  • Activity-based costing (ABC) systems ________. A. Unselected have the same cost allocation system as plantwide and departmental
    5·1 answer
  • On December 15, 2021, Rigsby Sales Co. sold a tract of land that cost $3,800,000 for $5,000,000. Rigsby appropriately uses the i
    10·1 answer
  • 18. It's often necessary to narrow a broad topic down while doing research to
    8·1 answer
  • During Year 1, Hardy Merchandising Company purchased $20,000 of inventory on account. Hardy sold inventory on account that cost
    13·1 answer
  • Explain the importance of thoroughly checking your SAR and what steps you can
    15·1 answer
  • Managers who have the ability to understand, alter, lead, or control the behavior of others are said to possess ______ skills.
    7·1 answer
  • Which form do you use to inventory the unexpended ammunition and residue you receive from the training field
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!