The K & L Partnership was established since 2005. On January 1, 2015, the partners agree to admit partner (M). Capital account balances and profit and loss sharing ratios at January 1, 2015, before the admission of partner (M), are as follows: Partner (K) (30%) $63,000 Partner (L) (70%) $97,000 at the time of admission the following assets have a book value and fair value as: Book Value Fair value Inventory 100,000 120,000 Building 130,000 100,000 Partner (M) invested $120,000 cash to the partners for 50% of capital interest and the partners agree about assets non-revaluation. The journal entry to record the admission of partner (M) is a. Dr. Cash $120,000/Cr. (K) capital $6,000, (L) capital $14,000, (M) capital $100,000. a. Dr. Cash $120,000/Cr. (K) capital $6,000, (L) capital $14,000, (M) capital $100,000. b. Dr. Cash $120,000/Cr. (K) capital $12,000, (L) capital $10,000, (M) capital $98,000. b. Dr. Cash $120,000/Cr. (K) capital $12,000, (L) capital $10,000, (M) capital $98,000. c. Dr. Cash $120,000, (K) capital $10,000, (L) capital $11,000/Cr. (M) capital $141,000. c. Dr. Cash $120,000, (K) capital $10,000, (L) capital $11,000/Cr. (M) capital $141,000. d. Dr. Cash $120,000, (K) capital $6,000,
The K & L Partnership was established since 2005. On January 1, 2015, the partners agree to admit partner (M). Capital account balances and profit and loss sharing ratios at January 1, 2015, before the admission of partner (M), are as follows: Partner (K) (30%) $63,000 Partner (L) (70%) $97,000 at the time of admission the following assets have a book value and fair value as: Book Value Fair value Inventory 100,000 120,000 Building 130,000 100,000 Partner (M) invested $120,000 cash to the partners for 50% of capital interest and the partners agree about assets non-revaluation. The journal entry to record the admission of partner (M) is a. Dr. Cash $120,000/Cr. (K) capital $6,000, (L) capital $14,000, (M) capital $100,000. a. Dr. Cash $120,000/Cr. (K) capital $6,000, (L) capital $14,000, (M) capital $100,000. b. Dr. Cash $120,000/Cr. (K) capital $12,000, (L) capital $10,000, (M) capital $98,000. b. Dr. Cash $120,000/Cr. (K) capital $12,000, (L) capital $10,000, (M) capital $98,000. c. Dr. Cash $120,000, (K) capital $10,000, (L) capital $11,000/Cr. (M) capital $141,000. c. Dr. Cash $120,000, (K) capital $10,000, (L) capital $11,000/Cr. (M) capital $141,000. d. Dr. Cash $120,000, (K) capital $6,000,
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The K & L Partnership was established since 2005. On January 1, 2015, the partners agree to admit partner (M). Capital account balances and profit and loss sharing ratios at January 1, 2015, before the admission of partner (M), are as follows:
Partner (K) (30%) $63,000 Partner (L) (70%) $97,000
at the time of admission the following assets have a book value and fair value as:
Book Value Fair value
Inventory 100,000 120,000
Building 130,000 100,000
Partner (M) invested $120,000 cash to the partners for 50% of capital interest and the partners agree about assets non-revaluation. The journal entry to record the admission of partner (M) is
a.
Dr. Cash $120,000/Cr. (K) capital $6,000, (L) capital $14,000, (M) capital $100,000.
a. Dr. Cash $120,000/Cr. (K) capital $6,000, (L) capital $14,000, (M) capital $100,000.
b.
Dr. Cash $120,000/Cr. (K) capital $12,000, (L) capital $10,000, (M) capital $98,000.
b. Dr. Cash $120,000/Cr. (K) capital $12,000, (L) capital $10,000, (M) capital $98,000.
c.
Dr. Cash $120,000, (K) capital $10,000, (L) capital $11,000/Cr. (M) capital $141,000.
c. Dr. Cash $120,000, (K) capital $10,000, (L) capital $11,000/Cr. (M) capital $141,000.
d.
Dr. Cash $120,000, (K) capital $6,000, (L) capital $14,000/Cr. (M) capital $140,000.
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