Professional Documents
Culture Documents
partnership. They wish to expand their computer lines and decide to admit
Wayne to the partnership. Debra's capital is $190,000, Merina's capital is
$152,000, and they share income in a ratio of 3:2, respectively.
Required: Record Wayne's admission for each of the following
independent situations:
a. Wayne directly purchases half of Merina's investment in the partnership
for $99,000.
b. Wayne invests the amount needed to give him a one-third interest in the
partnership's capital if no goodwill or bonus is recorded.
c. Wayne invests $110,000 for a 25 percent interest. Goodwill is to be
recorded.
d. Debra and Merina agree that some of the inventory is obsolete. The
inventory account is decreased before Wayne is admitted. Wayne invests
$100,000 for a 25 percent interest.
e. Wayne directly purchases a 25 percent interest by paying Debra
$96,000 and Merina $56,000. The land account is increased before Wayne
is admitted.
f. Wayne invests $72,000 for a 20 percent interest in the total capital of
$414,000.
g. Wayne invests $105,000 for a 20 percent interest. Goodwill is to be
recorded.
In the GMP partnership (to which Elan seeks admittance), the capital balances of Mary,
Gene, and Pat, who share income in the ratio of 6:3:1, are
Mary $ 240,000
Gene 120,000
Pat 40,000
Required:
a. If no goodwill or bonus is recorded, how much must Elan invest for a one-third
interest?
b. Prepare journal entry for the admission of Elan if she invests $80,000 for a 20
percent interest and goodwill is recorded.
c. Prepare journal entry for the admission of Elan if she invests $200,000 for a 20
percent interest. Total capital will be $600,000; the partners use the bonus method
Pam and John are partners in the PJ’s partnership, having capital
balances of $120,000 and $40,000, respectively, and share income in a
ratio of 3:1. Gerry is to be admitted into the partnership with a 20 percent
interest in the business.
Required:
Prepare journal entries to record Gerry’s admission into the partnership for
each of the following independent situations.
Required
Prepare journal entries for Don’s admission to the partnership in each of the following independent cases
1) don directly purchases half of mary’s interest in the partnership for $60,000. No goodwill is recorded.
2) Don purchases a one fourth interest in capital and income by paying a total of $70,000 directly to the prior partners.
Goodwill is recorded before don is admitted