Musa Moshref and Shaniqua Hollins have operated a successful firm for many years, sharing net income and net losses equally. Taylor Anderson is to be admitted to the partnership on July 1 of the current year, in accordance with the following agreement:

a.	Assets and liabilities of the old partnership are to be valued at their book values as of June 30, except for the following: Accounts receivable amounting to $2,300 are to be written off, and the allowance for doubtful accounts is to be increased to 5% of the remaining accounts. Merchandise inventory is to be valued at $76,300. Equipment is to be valued at $155,800.
b.	Anderson is to purchase $69,700 of the ownership interest of Hollins for $75,300 cash and to contribute another $45,800 cash to the partnership for a total ownership equity of $115,500.

The post-closing trial balance of Moshref and Hollins as of June 30 is as follows:

Moshref and Hollins

POST-CLOSING TRIAL BALANCE

June 30, 2016

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	8,400.00
2	Accounts Receivable	42,000.00
3	Allowance for Doubtful Accounts		1,585.00
4	Merchandise Inventory	72,200.00
5	Prepaid Insurance	3,600.00
6	Equipment	179,800.00
7	Accumulated Depreciation-Equipment		44,000.00
8	Accounts Payable		20,600.00
9	Notes Payable (current)		34,800.00
10	Musa Moshref, Capital		120,815.00
11	Shaniqua Hollins, Capital		84,200.00
12	Totals	306,000.00	306,000.00

	Required:
1.	Journalize the entries as of June 30 to record the revaluations, using a temporary account entitled Asset Revaluations. The balance in the accumulated depreciation account is to be eliminated. After journalizing the revaluations, close the balance of the asset revaluations account to the capital accounts of Musa Moshref and Shaniqua Hollins.
2.	Journalize the additional entries to record Andersons entrance to the partnership on July 1, 2016. Refer to the Chart of Accounts for exact wording of account titles.
3.	Present a balance sheet for the new partnership as of July 1, 2016. Refer to the information given and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries.

Chart of Accounts

CHART OF ACCOUNTS
Moshref, Hollins, and Anderson
General Ledger
ASSETS 110 Cash 111 Petty Cash 112 Accounts Receivable 113 Allowance for Doubtful Accounts 114 Interest Receivable 115 Notes Receivable 116 Merchandise Inventory 117 Supplies 118 Office Supplies 119 Prepaid Insurance 125 Equipment 126 Accumulated Depreciation-Equipment 129 Asset Revaluations 133 Patent LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Musa Moshref, Capital 311 Musa Moshref, Drawing 312 Shaniqua Hollins, Capital 313 Shaniqua Hollins, Drawing 314 Taylor Anderson, Capital 315 Taylor Anderson, Drawing 330 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Salary Expense 521 Advertising Expense 523 Depreciation Expense-Equipment 526 Repairs Expense 529 Selling Expenses 531 Rent Expense 533 Insurance Expense 534 Supplies Expense 535 Office Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Property Tax Expense 539 Miscellaneous Expense 710 Interest Expense

Journal

	Required:
1.	Journalize the entries as of June 30 to record the revaluations, using a temporary account entitled Asset Revaluations. The balance in the accumulated depreciation account is to be eliminated. After journalizing the revaluations, close the balance of the asset revaluations account to the capital accounts of Musa Moshref and Shaniqua Hollins.*
2.	Journalize the additional entries to record Andersons entrance to the partnership on July 1, 2016.* *Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
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Labels and Amount Descriptions

Labels
Current assets
Current liabilities
Plant assets
Amount Descriptions
Total assets
Total current assets
Total liabilities
Total liabilities and members equity
Total liabilities and partners equity
Total members equity
Total partners equity

Balance Sheet

3. Present a balance sheet for the new partnership as of July 1, 2016. Refer to the information given and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries.

MOSHREF, HOLLINS, AND ANDERSON

Balance Sheet

July 1, 2016

1	Assets
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12	Liabilities
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17	Partners Equity
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