Question
Required information Skip to question [The following information applies to the questions displayed below.] Pam and John are partners in the PJs partnership sharing income
Required information
Skip to question
[The following information applies to the questions displayed below.]
Pam and John are partners in the PJs partnership sharing income in a ratio of 3:1. Gerry is to be admitted into the partnership with a 20 percent interest in the business.
Pam | $ 120,000 |
---|---|
John | 40,000 |
Required:
Prepare journal entries to record Gerrys admission into the partnership for each of the following independent situations.
f. Gerry invests $35,000. During the valuation process made as part of admitting the new partner, the partnerships inventory is determined to be overvalued by $20,000 because of obsolescence. PJs partnership uses the lower-of-cost-or-market value method for inventories.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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