1.

Admitting New Partner Who Contributes Assets

After the tangible assets have been adjusted to current market prices, the capital accounts of Grayson Jackson and Harry Barge have balances of $115,000 and $184,000, respectively. Lewan Gorman is to be admitted to the partnership, contributing $77,000 cash to the partnership, for which he is to receive an ownership equity of $100,000. All partners share equally in income.

a. Journalize the entry to record the admission of Gorman, who is to receive a bonus of $23,000. If an amount box does not require an entry, leave it blank.

	CashGrayson Jackson, DrawingHarry Barge, DrawingLewan Gorman, CapitalLewan Gorman, Drawing	- Select -	- Select -
	Grayson Jackson, CapitalGrayson Jackson, DrawingHarry Barge, DrawingLewan Gorman, CapitalLewan Gorman, Drawing	- Select -	- Select -
	Grayson Jackson, DrawingHarry Barge, CapitalHarry Barge, DrawingLewan Gorman, CapitalLewan Gorman, Drawing	- Select -	- Select -
	CashGrayson Jackson, CapitalHarry Barge, CapitalLewan Gorman, CapitalLewan Gorman, Drawing	- Select -	- Select -

b. What are the capital balances of each partner after the admission of the new partner?

Partner	Balance
Grayson Jackson	$fill in the blank 329990fad079fd4_1
Harry Barge	$fill in the blank 329990fad079fd4_2
Lewan Gorman	$fill in the blank 329990fad079fd4_3

2.

Admitting New Partner With Bonus

Cody Jenkins and Lacey Tanner formed a partnership to provide landscaping services. Jenkins and Tanner shared profits and losses equally. After all the tangible assets have been adjusted to current market prices, the capital accounts of Cody Jenkins and Lacey Tanner have balances of $68,000 and $88,000, respectively. Valeria Solano has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Tanner deem these skills useful; thus, Solano is admitted to the partnership at a 30% interest for a purchase price of $42,000.

a. Determine the recipient and amount of the partner bonus. $fill in the blank 044326fe6fa4f8b_1

Cody JenkinsCody Jenkins and Lacey TannerLacey TannerValeria Solano

b. Provide the journal entry to admit Solano into the partnership. If an amount box does not require an entry, leave it blank.

	CashCody Jenkins, DrawingLacey Tanner, DrawingValeria Solano, CapitalValeria Solano, Drawing	- Select -	- Select -
	Cody Jenkins, CapitalCody Jenkins, DrawingLacey Tanner, DrawingValeria Solano, CapitalValeria Solano, Drawing	- Select -	- Select -
	Cody Jenkins, DrawingLacey Tanner, CapitalLacey Tanner, DrawingValeria Solano, CapitalValeria Solano, Drawing	- Select -	- Select -
	CashCody Jenkins, CapitalCody Jenkins, DrawingLacey Tanner, CapitalValeria Solano, Capital	- Select -	- Select -

3.

Admitting a New LLC Member With Bonus

Alert Medical, LLC, consists of two doctors, Abrams and Lipscomb, who share in all income and losses according to a 2:3 income-sharing ratio. Dr. Lin has been asked to join the LLC. Prior to admitting Lin, the assets of Alert Medical were revalued to reflect their current market values. The revaluation resulted in medical equipment being increased by $30,000. Prior to the revaluation, the equity balances for Abrams and Lipscomb were $288,000 and $330,000, respectively.

a. Provide the journal entry for the asset revaluation. If an amount box does not require an entry, leave it blank.

	CashAbrams, Member EquityFinn, Member EquityKoster, Member EquityMedical Equipment	- Select -	- Select -
	Abrams, DrawingAbrams, Member EquityLipscomb, DrawingLin, Member EquityMedical Equipment	- Select -	- Select -
	CashAbrams, DrawingLipscomb, Member EquityLin, Member EquityMedical Equipment	- Select -	- Select -

b. Provide the journal entry for the bonus under the following independent situations:

1. Lin purchased a 30% interest in Alert Medical, LLC, for $369,000. If an amount box does not require an entry, leave it blank.

	CashAbrams, Member EquityLipscomb, DrawingLipscomb, Member EquityKoster, Member Equity	- Select -	- Select -
	CashAbrams, DrawingAbrams, Member EquityLipscomb, DrawingKoster, Drawing	- Select -	- Select -
	Abrams, DrawingLipscomb, DrawingLipscomb, Member EquityLin, DrawingMedical Equipment	- Select -	- Select -
	CashAbrams, DrawingLipscomb, DrawingLin, DrawingLin, Member Equity	- Select -	- Select -

4.

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 $12,000. The capital balances of each partner are $112,000 and $156,000, respectively, prior to the revaluation.

a. Provide the journal entry for the asset revaluation. If an amount box does not require an entry, leave it blank.

	EquipmentL. Bowers, CapitalL. Bowers, DrawingV. Lipscomb, DrawingM. Ortiz, Capital	- Select -	- Select -
	CashEquipmentL. Bowers, DrawingV. Lipscomb, CapitalM. Ortiz, Capital	- Select -	- Select -
	EquipmentL. Bowers, CapitalM. Ortiz, CapitalM. Ortiz, DrawingV. Lipscomb, Capital	- Select -	- Select -

b. Provide the journal entry for Ortizs admission under the following independent situations:

1. Ortiz purchased a 20% interest for $56,000. If an amount box does not require an entry, leave it blank.

	CashEquipmentL. Bowers, DrawingM. Ortiz, CapitalV. Lipscomb, Drawing	- Select -	- Select -
	EquipmentL. Bowers, CapitalM. Ortiz, CapitalM. Ortiz, DrawingV. Lipscomb, Drawing	- Select -	- Select -
	EquipmentL. Bowers, DrawingV. Lipscomb, CapitalV. Lipscomb, DrawingM. Ortiz, Capital	- Select -	- Select -
	CashL. Bowers, CapitalM. Ortiz, CapitalM. Ortiz, DrawingV. Lipscomb, Capital	- Select -	- Select -

2. Ortiz purchased a 30% interest for $140,000. If an amount box does not require an entry, leave it blank.

	CashEquipmentL. Bowers, DrawingM. Ortiz, CapitalV. Lipscomb, Drawing	- Select -	- Select -
	CashEquipmentL. Bowers, CapitalM. Ortiz, DrawingV. Lipscomb, Drawing	- Select -	- Select -
	CashEquipmentL. Bowers, DrawingV. Lipscomb, CapitalM. Ortiz, Drawing	- Select -	- Select -

5.

Withdrawal of Partner

Lane Stevens is to retire from the partnership of Stevens and Associates as of March 31, the end of the current fiscal year. After closing the accounts, the capital balances of the partners are as follows: Lane Stevens, $302,000; Cherrie Ford, $154,000; and LaMarcus Rollins, $172,000. They have shared net income and net losses in the ratio of 3:2:2. The partners agree that the merchandise inventory should be increased by $27,700, and the allowance for doubtful accounts should be increased by $6,700. Stevens agrees to accept a note for $250,000 in partial settlement of his ownership equity. The remainder of his claim is to be paid in cash. Ford and Rollins are to share equally in the net income or net loss of the new partnership.

a. Journalize the entry to record the adjustment of the assets to bring them into agreement with current market prices. If an amount box does not require an entry, leave it blank.

	Allowance for Doubtful AccountsCherrie Ford, CapitalLaMarcus Rollins, CapitalLane Stevens, CapitalMerchandise Inventory	- Select -	- Select -
	Allowance for Doubtful AccountsCashCherrie Ford, DrawingLaMarcus Rollins, DrawingMerchandise Inventory	- Select -	- Select -
	CashCherrie Ford, DrawingLaMarcus Rollins, DrawingLane Stevens, CapitalMerchandise Inventory	- Select -	- Select -
	Accounts PayableCashCherrie Ford, CapitalLaMarcus Rollins, DrawingLane Stevens, Drawing	- Select -	- Select -
	Accounts ReceivableCherrie Ford, DrawingLaMarcus Rollins, CapitalLane Stevens, DrawingMerchandise Inventory	- Select -	- Select -

b. Journalize the entry to record the withdrawal of Stevens from the partnership. If an amount box does not require an entry, leave it blank.

	CashCherrie Ford, CapitalLaMarcus Rollins, CapitalLane Stevens, CapitalNotes Payable	- Select -	- Select -
	CashCherrie Ford, CapitalLaMarcus Rollins, CapitalLane Stevens, CapitalMerchandise Inventory	- Select -	- Select -