Peter Nguyen and Loren Washington Are Partners Who Share Profits

Question 95
Essay

Peter Nguyen and Loren Washington are partners who share profits and losses in the ratio of 60:40,respectively.On December 31,2016,they decide that Washington will sell one-half of her interest to Grace Dolores.At that time,the balances of the capital accounts are $75,000 for Nguyen and $45,000 for Washington.The partners agree that before the new partner is admitted,certain assets should be revalued.These assets include merchandise inventory carried at $42,000 revalued at $48,000,and a building with a book value of $100,000 revalued at $120,000.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.