P 16-13 Recording new partner investment—Complex non-revaluation and revaluation cases A condensed balance sheet for the Pet, Qua, and She partnership at December 31, 2016, and their profitand loss-sharing percentages on that date are as follows:

Condensed Balance Sheet at December 31, 2016 Cash $15,000 Liabilities $50,000 Other assets 185,000 Pet capital (50%) 75,000 Total assets $200,000 Qua capital (30%) 50,000 She capital (20%) 25,000 Total liabilities and capital $200,000 On January 1, 2017, the partners decided to bring Tom into the partnership for a one-fourth interest in the capital and profits of the partnership. The following proposals for Tom’s admittance into the partnership were considered:

1. Tom would purchase one-half of Pet’s capital and right to future profits directly from Pet for $60,000.

2. Tom would purchase one-fourth of each partner’s capital and rights to future profits by paying a total of $45,000 directly to the partners.

3. Tom would invest $55,000 cash in the partnership for a 25 percent interest in capital. Future profits would be divided 37.5 percent, 22.5 percent, 15 percent, and 25 percent for Pet, Qua, She, and Tom, respectively.

REQuIRED: Prepare journal entries with supporting computations to show Tom’s admittance into the partnership under each of the given proposals assuming that:

1. Partnership net assets are not to be revalued.

2. Partnership net assets are to be revalued.