After the tangible assets have been adjusted to current market prices, the capital accounts of Elayne Summers and Murv

Newcomb have balances of $$106,000$ and $$170,000,$ respectively. Rose Clayton is to be admitted to the partnership, contributing

$$71,000$ cash to the partnership, for which she is to receive an ownership equity of $$92,000.$ All partners share equally in

income.

a$.$ Journalize the entry to record the admission of Rose Clayton, who is to receive a bonus of $$21,000.$ If an amount box does

not require an entry, leave it blank.

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

Partner

Balance

Elayne Summers

Murv Newcomb

Rose Clayton

$

$

c$.$ Why are tangible assets adjusted to current market prices prior to admitting a new partner?

Tangible assets should be adjusted to current market prices so that the new partner

any gains or losses

from changes in market prices prior to being admitted. For example, if the market price of land doubled prior to admitting new