Question

Do practice exercise 12-3A on page 613. Briefly explain your work. Suggest an alternative accounting method that could have been used to record the admission of Roberts into the firm.

12-3A

Craig Roberts purchased one-half of Ennis Leighton’s interest in the Vale and Leighton
partnership for $34,000. Prior to the investment, land was revalued to a market value of $130,000 from a book value of $80,000. Tony Vale and Ennis Leighton share net income equally. Leighton had a capital balance of $36,000 prior to these transactions.
a. Provide the journal entry for the revaluation of land. b. Provide the journal entry to admit Roberts.

b. Provide the journal entry to admit Roberts.

Answer 1