Musa Moshref and Shaniqua Hollins have operated a successful firm for many years, sharing net income and net losses equally Taylor Anderson is to be admitted to the partnership on July 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 June 30, except for the following Accounts receivable amounting to $2,700 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 $77,300 Equipment is to be valued at $156,500 b Anderson is to purchase $70,800 of the ownership interest of Hollins for $75,000 cash and to contribute another $44,900 cash to the partnership for a total ownership equity of $115,700 The post closing trial balance of Moshref and Hollins as of June 30 is as follows Moshref and Hollins POST CLOSING TRIAL BALANCE June 30, 2016 ACCOUNT TITLE DEBIT CREDIT 1 Cash 8,000 00 2 Accounts Receivable 42,400 00 3 Allowance for Doubtful Accounts 1,785 00 4 Merchandise Inventory 71,900 00 5 Prepaid Insurance 2,800 00 6 Equipment 180,600 00 7 Accumulated Depreciation Equipment 42,800 00 8 Accounts Payable 20,300 00 9 Notes Payable (current) 34,000 00 10 Musa Moshref, Capital 122,515 00 11 Shaniqua Hollins, Capital 84,300 00 12 Totals 305,700 00 305,700 00 Required 1 Journalize the entries as of June 30 to record the revaluations, using a temporary account entitled Asset Revaluations The balance 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 Musa Moshref and Shaniqua Hollins 2 Journalize the additional entries to record Andersons entrance to the partnership on July 1, 2016 Refer to the Chart of Accounts for exact wording of account titles 3 Present a balance sheet for the new partnership as of July 1, 2016 Refer to the information given and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 10, 2024

Musa Moshref and Shaniqua Hollins have operated a successful firm for many years, sharing net income and net losses equally. Taylor Anderson is to be

Musa Moshref and Shaniqua Hollins have operated a successful firm for many years, sharing net income and net losses equally. Taylor Anderson is to be admitted to the partnership on July 1 of the current year, in accordance with the following agreement:

Assets and liabilities of the old partnership are to be valued at their book values as of June 30, except for the following:

	Accounts receivable amounting to $2,700 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 $77,300.
	Equipment is to be valued at $156,500.

Anderson is to purchase $70,800 of the ownership interest of Hollins for $75,000 cash and to contribute another $44,900 cash to the partnership for a total ownership equity of $115,700.

The post-closing trial balance of Moshref and Hollins as of June 30 is as follows:

Moshref and Hollins

POST-CLOSING TRIAL BALANCE

June 30, 2016

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	8,000.00
2	Accounts Receivable	42,400.00
3	Allowance for Doubtful Accounts		1,785.00
4	Merchandise Inventory	71,900.00
5	Prepaid Insurance	2,800.00
6	Equipment	180,600.00
7	Accumulated Depreciation-Equipment		42,800.00
8	Accounts Payable		20,300.00
9	Notes Payable (current)		34,000.00
10	Musa Moshref, Capital		122,515.00
11	Shaniqua Hollins, Capital		84,300.00
12	Totals	305,700.00	305,700.00

	Required:
1.	Journalize the entries as of June 30 to record the revaluations, using a temporary account entitled Asset Revaluations. The balance 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 Musa Moshref and Shaniqua Hollins.
2.	Journalize the additional entries to record Andersons entrance to the partnership on July 1, 2016. Refer to the Chart of Accounts for exact wording of account titles.
3.	Present a balance sheet for the new partnership as of July 1, 2016. Refer to the information given and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries.