E 16-20 Recording new partner investment After operating as partners for several years, Gro and Ham decided to sell one-half of each of their partnership interests to Lot for a total of $70,000, paid directly to Gro and Ham.

At the time of Lot’s admittance to the partnership, Gro and Ham had capital balances of $45,000 and $65,000, respectively, and shared profits 45 percent to Gro and 55 percent to Ham.

REQuIRED 1. Calculate the capital balances of each of the partners immediately after Lot is admitted as a partner assuming that the assets are not revalued, and prepare a second calculation of the capital balances assuming that the assets are revalued at the time Lot is admitted.