PE 12-3A Revaluing and contributing assets to a partnership

Antoine Dodd purchased one-half of Kyle Bryan’s interest in the Rich and Bryan partnership for $24,000. Prior to the investment, land was revalued to a market value of $110,000 from a book value of $84,000. Zach Rich and Kyle Bryan share net income equally. Bryan had a capital balance of $25,000 prior to these transactions.
a. Provide the journal entry for the revaluation of land.
b. Provide the journal entry to admit Dodd.

Answer:
a.
Land........................................... 26,000  
             Zach Rich, Capital ...........................  13,000*  
             Kyle Bryan, Capital...........................  13,000  
*($110,000 – $84,000) × 50%

b.
Kyle Bryan, Capital............................ 19,000
             Antoine Dodd, Capital.........................  19,000*  
*($25,000 + $13,000) × 50%

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