Answer:
Explanation:
The journal entries are presented below:
a. Merchandise Inventory $22,300
To Allowance for Doubtful Accounts A/c $1,300
To Lane Stevens, Capital A/c $9,000
To Cherrie Ford, Capital A/c $6,000
To LaMarcus Rollins, Capital A/c $6,000
(Being the revaluation of assets is recorded)
The computation is shown below:
= $22,300 - $1,300
= $21,000
And 21,000 is distributed in 3:2:2 ratio
b. Lane Stevens, Capital A/c Dr $159,000
To Notes Receivable A/c $100,000
To Cash A/c $59,000
(Being the withdrawn amount is recorded)
The lane Stevens capital would be
= $150,000 + $9,000
= $59,000
