Problem

The partnership of Mor and Osc is being dissolved, and the assets and equities at book val...

The partnership of Mor and Osc is being dissolved, and the assets and equities at book value and fair value and the profit- and loss-sharing ratios at January 1, 2011, are as follows:

 

Book Value

Fair Value

Cash

$20,000

$20,000

Accounts receivable—net

100,000

100,000

Inventories

50,000

200,000

Plant assets—net

100,000

120,000

 

$270,000

$440,000

Accounts payable

$50,000

$50,000

Mor capital (50%)

120,000

 

Osc capital (50%)

100,000

 

 

$270,000

 

Mor and Osc agree to admit Tre into the partnership for a one-third interest. Tre invests $95,000 cash and a building to be used in the business with a book value to Tre of $100,000 and a fair value of $120,000.

REQUIRED

1. Prepare a balance sheet for the Mor, Osc, and Tre partnership on January 2, 2011, just after the admission of Tre, assuming that the assets are revalued and goodwill is recognized.


2. Prepare a balance sheet for the Mor, Osc, and Tre partnership on January 2, 2011, after the admission of Tre, assuming that the assets are not revalued.

Step-by-Step Solution

Request Professional Solution

Request Solution!

We need at least 10 more requests to produce the solution.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the solution will be notified once they are available.
Add your Solution
Textbook Solutions and Answers Search
Solutions For Problems in Chapter 16