Asked by Nicole Stout on Jun 11, 2024
Verified
Gleason invested $90,000 in the James and Kirk Partnership for ownership equity of $90,000. Prior to the investment, land was revalued to a market value of $425,000 from a book value of $200,000. James and Kirk share net income in a 1:2 ratio.
(a) Provide the journal entry for the revaluation of land.
(b) Provide the journal entry to admit Gleason.
Ownership Equity
The remaining interest in the assets of a business after all debts have been subtracted, signifying the ownership stake.
Revaluation Of Land
The process of adjusting the book value of land to reflect its current market value, resulting in a change in the asset's valuation on the balance sheet.
Market Value
The price at which assets or services are currently being exchanged in the marketplace.
- Register partnership dealings, such as member contributions, adjustments in asset values, and allocation of profits.
- Understand the process and implications of admitting new partners to an existing partnership.
Verified Answer
LF
Lawrence FordeJun 17, 2024
Final Answer :
(a) Land 225,000\text { (a) Land } \quad\quad\quad225,000 (a) Land 225,000
James, Capital 75,000 Kirk, Capital 150,000\begin{array}{lr}\text { James, Capital } & 75,000 \\\text { Kirk, Capital } & 150,000\end{array} James, Capital Kirk, Capital 75,000150,000
James, Capital 75,000 Kirk, Capital 150,000\begin{array}{lr}\text { James, Capital } & 75,000 \\\text { Kirk, Capital } & 150,000\end{array} James, Capital Kirk, Capital 75,000150,000
Learning Objectives
- Register partnership dealings, such as member contributions, adjustments in asset values, and allocation of profits.
- Understand the process and implications of admitting new partners to an existing partnership.