Nancy Conradt and Chris Russell Are Partners Who Share Profits

question 21

Essay

Nancy Conradt and Chris Russell are partners who share profits and losses in the ratio of 60:40, respectively. On December 31, 2013, they decide that Russell will sell one-half of his interest to Pam Ortega. At that time, the balances of the capital accounts are $500,000 for Conradt and $700,000 for Russell. The partners agree that before the new partner is admitted, certain assets should be revalued. These assets include merchandise inventory carried at $411,200 revalued at $403,600, and a building with a book value of $260,000 revalued at $450,000. 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.

Understand the basic components and calculations involved in a balance sheet.

Comprehend purchasing, pricing, compensation, and policies relevant to business operations.

Understand the concepts and calculations related to the cash conversion cycle (CCC), Days of Inventory (DOI), Days Sales Outstanding (DSO), and Days Payable Outstanding (DPO).

Distinguish between different types of business financial statements and their purposes.

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Definitions:

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