Wade Wilson operates a small shop that sells fishing equipment. His postclosing trial balance on December $31,20$X$1,$ is shown below.

Wilson plans to enter into a partnership with Damon Darnell, effective January $1,20$X$2.$ Profits and losses will be shared equally. Wilson is to transfer all assets and liabilities of his store to the partnership after revaluation as agreed. Darnell will invest cash equal to Wilson$$s investment after revaluation. The agreed values are Accounts Receivable $($net$),$ $$116,000$; Merchandise Inventory, $$399,200$; and Furniture and Equipment, $$98,400.$ The partnership will operate as Wilson and Darnell Angler$$s Outpost.

Wilson's Tackle Center

Postclosing Trial Balance

December $31,20$X$1$

Account Name Debit Credit

Cash $ $38,000$

Accounts Receivable $131,200$

Allowance for Doubtful Accounts $ $20,000$

Merchandise Inventory $360,000$

Furniture and Equipment $232,800$

Accumulated Depreciation $184,000$

Accounts Payable $32,000$

Capital $526,000$

Totals $ $762,000$ $ $762,000$

Required:

In general journal form, prepare the entries to record:

The receipt of Wilson$$s investment of assets and liabilities by the partnership.

The receipt of Darnell$$s investment of cash.

Prepare a balance sheet for Wilson and Darnell Angler$$s Outpost just after the investments.

Analyze:

By what net amount were the net assets of Wilson$$s Tackle Center adjusted before they were transferred to the partnership?