Admitting New Partner Brian Caldwell and Adriana Estrada have operated a successful firm for many years, sharing net income and net losses equally, Kris Mays is to be admitted to the partnership on September 1 of the current year, in accordance with the following agreement: a. Assets and liabilities of the old partnership are to be valued at their book values as of August 31, except for the following: - Accounts recelvable amounting to $2,800 are to be written off, and the allowance for doubtful accounts is to be increased to 5% of the remaining accounts. - Merchandise inventory is to be valued at $70,600. - Equipment is to be valued at $156,100. b. Mays is to purchase $67,000 of the ownership interest of Estrada for $73,000 cash and to contribute $36,000 cash to the partnership for a total ownership equity of $103,000. The post-closing trial balance of Caldwell and Estrada as of August 31 follows: The post-closing trial balance of Caldwell and Estrada as of August 31 follows: Caldwell and Estrada Post-Closing Trial Balance August 31, 20Yg Cash Accounts Receivable 43,000 Allowance for Doubtful Accounts 1,600 Merchandise Inventory Prepaid insurance Equipment 181,000 Accumulated Depreciation-Equipment Accounts Payable Notes Payable (current) Brian Caldwell, Capital 100,000 Adriana Estrodo, Copital 87,000 1. Journalize the entries as of August 31 to record the revaluations, using a temporary account entitled Asset Revaluations. Debits and credits to the asset revaluations account are losses and gains from revaluation, respectively, The baiance 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 Brian Caldwelf and Adriana Estrada. If an amount box does not require an entry, leave it blank. credits to the asset revaluations account are losses and gains from revaluation, respectively. The balance in the accumulated account is to be ellminated. After journalizing the revaluations, close the balance of the asset revaluations account to the ca Eebrarls if an amount box does not require an entry, leave it blank. 3. Present a balance sheet for the new partnership as of September 1,20 y 9 . Total-current assets: Property, plant, and equipment: Total assets Liobilities. Current liabilities: Total liabilities Rartners' Equity Feodoxck 7 Chrck My Woik 3. The baiance sheet for a partnership is a formal presentation of the accounting equation and includes the capltal account balance for eoch portner in the equity section. All balances should refiect the recorded adjustments and admission of Mayg
