Brian Colt and Karen Randall Are Partners Who Share Profits

Question 94
Essay

Brian Colt and Karen Randall are partners who share profits and losses in the ratio of 70:30,respectively.On December 31,2016,they decide that Randall will sell one-half of her interest to Jane Wu.At that time,the balances of the capital accounts are $70,000 for Colt and $30,000 for Randall.The partners agree that before the new partner is admitted,certain assets should be revalued.These assets include merchandise inventory carried at $11,000 revalued at $10,000,and a building with a book value of $60,000 revalued at $70,000.On page 10 of a general journal,record the revaluation entries.Omit descriptions.Then,determine the capital balances of the two existing partners after the revaluation is made.