On December 31, 2017, Jim Austin and Mike Mundy agree to combine their proprietorships as a partnership. Their balance sheets on December 31 are as follows:

Required
1. Prepare the partnership balance sheet at December 31, 2017.
2. Assume John Allen wants to join the partnership by paying $212,000 for a 1/4 interest. The partnership equity before John joins is $960,000, and Jim Austin and Mike Mundy shared profits 60 percent for Austin and 40 percent for Mundy. Prepare the journal entry to record Allen's admission to the partnership on January 1, 2018.
3. What percent of the profits will John Allen receive after becoming a partner?

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Austin's Business Book ValueMarket Value Mundy's Business Book Current Current Market Value Value Assets Cas Accounts receivable (net Inventory Capital assets (net. $ 30,000 30,000 $25,000 25,000 35,000 230,000 170,000 180,000 525,000 270,000 300,000 $885,000 $505,000 $540,000 110,000 255,000 610,000 $1,005,000 100,000 40,000 Total asse Liabilities and Equity Accounts pavable $120,000 $120,000 $ 50,000 $50,000 10,000 Accrued expenses payable... N ble 10,000 275,000 600,000 10,000 275,000 480,000 10,000 otes paya Jim Austin, capita Mike Mundy, capital. Total liabilities and equity. 445,000 480,000 $1,005,000 $885,000 $505,000 $540,000