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Craig Roberts purchased one-half of Ennis Leightons interest in the Vale and Leighton partnership for $34,000. Prior to the investment, land was revalued to a
Craig Roberts purchased one-half of Ennis Leightons interest in the Vale and Leighton partnership for $34,000. Prior to the investment, land was revalued to a market value of $130,000 from a book value of $80,000. Tony Vale and Ennis Leighton share net income equally. Leighton had a capital balance of $36,000 prior to these transactions.
Identify the accounting method used to record the admission of Roberts. Suggest an atternative method that could have been used to account for the admission of Roberts. Explain the difference.
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