James Walker operates a store that sells computer software. Walker has agreed to enter into a partnership with Robert Tolliver, effective January 1, 20X1. The new firm will be called International Computing. Walker is to transfer all assets and liabilities of his firm to the partnership at the values agreed on. Tolliver will invest cash that is equal to 75 percent of Walker's investment after revaluation. The accounts shown on Walker's books and the agreed-on value of assets and liabilities are shown below. Balances Value Shown in Agreed to Walker's Records by Partners Assets Transferred Cash $200,000 $200,000 Accounts Receivable $131,000 Allowance for Doubtful Accounts 5,000 126,000 112,000 360,000 375,000 Merchandise Inventory Furniture and Equipment Accumulated Depreciation 140,000 100,000 60,000 80,000 Total Assets $766,000 $ 787,000 Liabilities and Owner's Equity Transferred Accounts Payable James Walker, Capital 70,000 70,000 $696,000 $717,000 Page 691 INSTRUCTIONS 1. Prepare the general journal entries to record the following transactions in the books of the partnership on January 1, 20X1: a. Receipt of Walker's investment of assets and liabilities. b. Receipt of Tolliver's investment of cash. 2. Prepare a balance sheet for the partnership as of the beginning of its operations on January 1, 20X1. Analyze: Based on the balance sheet you have prepared, what percentage (to the nearest 1/10 of 1%) of total equity is owned by James Walker