ACCTG 28

ASSIGNMENT 3 - PARTNERSHIP DISSOLUTION

Following is the current balance sheet for a local partnership of doctors:

Cash and current                                      Liabilities . . . . . . . . . . . . . . . . . $ 40,000
assets . . . . . . . . . . . . . . . . . . $ 30,000     A, capital . . . . . . . . . . . . . . . . . 20,000
Land . . . . . . . . . . . . . . . . . . . . 180,000    B, capital . . . . . . . . . . . . . . . . . 40,000
Building and                                             C, capital . . . . . . . . . . . . . . . . . 90,000
equipment (net) . . . . . . . . . . . 100,000  D, capital . . . . . . . . . . . . . . . . . 120,000
Totals . . . . . . . . . . . . . . . . . . $310,000    Totals . . . . . . . . . . . . . . . . . . $310,000
The following questions represent independent situations:
a. E is going to invest enough money in this partnership to receive a 25 percent interest. No good
b. E contributes $36,000 in cash to the business to receive a 10 percent interest in the partnershi
c. E contributes $42,000 in cash to the business to receive a 20 percent interest in the partnershi
d. E contributes $55,000 in cash to the business to receive a 20 percent interest in the partnershi
e. C retires from the partnership and, as per the original partnership agreement, is to receive cas

A. B.
Capital Balances
A, Capital 20,000.00 A, Capital
B, Capital 40,000.00 B, Capital
C, Capital 90,000.00 C, Capital
D, Capital 120,000.00 D, Capital
E, Capital E, Capital
270000/.75= 360,000.00 TCC
360000*.25= 90,000.00

A, Capital
B, Capital
C, Capital
D, Capital
E, Capital
TCC
. . . . $ 40,000
. . . . 20,000
. . . . 40,000
. . . 90,000
. . . 120,000
. . $310,000

a 25 percent interest. No goodwill or bonus is to be recorded. How much should E invest?

rcent interest in the partnership. Goodwill is to be recorded. Profits and losses have previously been split according to
cent interest in the partnership. Goodwill is to be recorded. The four original partners share all profits and losses equ
rcent interest in the partnership. No goodwill or other asset revaluation is to be recorded. Profits and losses have pre
p agreement, is to receive cash equal to 125 percent of her final capital balance. No goodwill or other asset revaluatio

C.
Capital Balances
20,000.00 A, Capital
40,000.00 B, Capital
90,000.00 C, Capital
120,000.00 0.90 300,000.00 D, Capital
36,000.00 0.10 360,000.00 NEW TAC E, Capital
306,000.00 TCC

Capital Balances Goodwill

20,000.00 16,200.00 36,200.00 A, Capital
40,000.00 5,400.00 45,400.00 B, Capital
90,000.00 21,600.00 111,600.00 C, Capital
120,000.00 10,800.00 130,800.00 D, Capital
36,000.00 - 36,000.00 E, Capital
306,000.00 54,000.00 360,000.00 TCC
 previously been split according to the following percentages: A, 30 percent; B, 10 percent; C, 40 percent; and D, 20
rs share all profits and losses equally. After E makes this investment, what are the individual capital balances?
rded. Profits and losses have previously been split according to the following percentages: A, 10 percent; B, 30 perce
goodwill or other asset revaluation is to be recognized. All partners share profits and losses equally. After the withdr

D.
Capital Balances Capital Balances
20,000.00 A, Capital 20,000.00
40,000.00 B, Capital 40,000.00
90,000.00 C, Capital 90,000.00
120,000.00 0.80 337,500.00 NEW TAC D, Capital 120,000.00
42,000.00 0.20 210,000.00 E, Capital 55,000.00
312,000.00 TCC 325,000.00

Capital Balances Goodwill

20,000.00 - 20,000.00
40,000.00 - 40,000.00
90,000.00 - 90,000.00
120,000.00 - 120,000.00
42,000.00 25,500.00 67,500.00
312,000.00 25,500.00 337,500.00
0 percent; and D, 20 percent. After E makes this investment, what are the individual capital balances?
ital balances?
percent; B, 30 percent; C, 20 percent; and D, 40 percent. After E makes this investment, what are the individual cap
ally. After the withdrawal, what are the individual capital balances of the remaining partners?

E. Capital Balances Settlement

A, Capital 20,000.00
(1,000.00) 19,000.00 B, Capital 40,000.00
(3,000.00) 37,000.00 C, Capital 90,000.00 112,500.00
(2,000.00) 88,000.00 D, Capital 120,000.00
(4,000.00) 116,000.00
10,000.00 65,000.00
- 325,000.00
l balances?

what are the individual capital balances?

Bonus to C Balance After

(7,500.00) 12,500.00
(7,500.00) 32,500.00
22,500.00 -
(7,500.00) 112,500.00