OBJ. 3 PR 12-4A Admitting new partner 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 $2,500 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 $76,600. Equipment is to be valued at $155,700. b. Anderson is to purchase $70,000 of the ownership interest of Hollins for $75,000 cash and to contribute another $45,000 cash to the partnership for a total ownership equity of $115,000. (Continued) . Accounting for Partnerships and Limited Liability Companies The post-closing trial balance of Moshref and Hollins as of June 30 is as follows: Credit Balances 1,600 Moshref and Hollins Post-Closing Trial Balance June 30, 2016 Debit Balances Cash 8,000 Accounts Receivable 42,500 Allowance for Doubtful Accounts Merchandise Inventory 72,000 Prepaid Insurance 3,000 Equipment 180,500 Accumulated Depreciation Equipment Accounts Payable Notes Payable (current) Musa Moshref, Capital Shaniqua Hollins, Capital 306,000 43,100 21,300 35,000 120,000 85,000 306,000 Instructions 1. Journalize the entries as of June 30 to record the revaluations, using a temporary ac- count 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 Anderson's entrance to the partnership on July 1, 2016. 3. Present a balance sheet for the new partnership as of July 1, 2016