The balance sheet of The Office Equipment and Supply Shop after the revenue, expense, and partners' drawing accounts have been closed on December 31, 2016, is provided below.
On that date, Rush, Hatten, and Booker agree to admit Rosie Hinojosa to the partnership. The partnership agreement among Rush, Hatten, and Booker provides that in case of dissolution of the partnership, all assets and liabilities should be revalued. Profits and losses are shared in the ratio of 50:20:30 to Rush, Hatten, and Booker, respectively. The agreed upon values of the assets are given below:
Accounts receivable ....................... $ 10,040
Merchandise inventory .................... 202,000
Equipment .................................... 36,000
Building ....................................... 58,000
Land .......................................... 46,200
All liabilities are properly recorded.

Instructions
1. Prepare the general journal entries to record revaluation of the partnership's assets.
2. Prepare the general journal entry (or entries) to record Hinojosa's investment of $66,000, assuming that she is to receive credit for the amount invested.
3. Prepare the general journal entry (or entries) to record Hinojosa's investment of $66,000, assuming that she is to receive one-fifth of the capital of the entity.
4. Prepare the general journal entry (or entries) to record Hinojosa's investment of $66,000, assuming that she is to receive 45 percent of the capital of the entity.
5. Assume that after the revaluation had been recorded, the existing partners and Hinojosa decided that their previous agreement should be canceled and that Hinojosa should not become a partner. Instead, the partners agreed that Booker would withdraw from the partnership.
a. Prepare the general journal entry to record the payment to Booker if he is paid an amount equal to his capital account balance after the revaluation.
b. Prepare the general journal entry to record the payment to Booker if he is paid an amount equal to $6,500 less than his capital account balance after the revaluation.
c. Prepare the general journal entry to record the payment to Booker if he is paid an amount equal to $9,000 more than his capital account balance after the revaluation.
Analyze: Assume only items 1 and 5(b) occurred. What is the balance of the Billy Hatten, Capital account at December 31, 2016?

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The Office Equipment and Supply Shop Balance Sheet December 31, 2016 Assets Cash Accounts Receivable Merchandise Inventory 12 210 Accumulated Depreciation-Equipment 37 210 00000 Accumulated Depreciation Building 376 Liabilities and Partners Equity 15 16 231 0 0 0 00 Helen Rush, Capital Quinton Booker Capital 145 otal Liabilities and Partners Equity