How much will Wen pay, May is willing to sell 40% of her

How much will Wen pay

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Reference no: EM132833209

Question - Pen and May have capital balances of 450,000, and 650,000 as of December 31, 2018. Pen and May share 40% and 60% in the profits and losses. The partners believe that the following assets should be adjusted.

Accounts Receivable

Book Value- 120,000

Market Value- 102,000

Inventory

Book Value- 200,000

Market Value- 258,000

Wen is interested in buying a 40% interest from anyone of the partners.

Required -

a) Entry to record adjustments. Extract the revised capital balances.

b) May is willing to sell 40% of her interest and profit at a price that will earn for her a profit of 15,000. How much will Wen pay?

c) Give the entry to admit Wen for a 40% interest

d) Determine the revised partners' capital after admission

e) For 2019, taxable profit earned was 320,000. Give the profit share of each partner.

Reference no: EM132833209

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