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PROBLEM 2
A B Partnership
Cash 20,000 30,000 50,000
Inventory 20,000 20,000
Building (at fair value) 60,000 60,000
Furniture & fixtures 40,000 40,000
Total Assets 60,000 110,000 170,000
Less: Liabilities
Mortgage Payable (10,000) 10,000
Adjusted capital balances 60,000 100,000 160,000
Journal Entry
2. BONUS METHODS
Journal Entry
A B C Partnership
Cash 500,000 200,000 100,000 800,000
Accounts Receivable 700,000 700,000
Inventory 900,000 900,000
Equipment 2,000,000 2,000,000
Mortgage Payable (800,000) (800,000)
Net Contribution 1,200,000 1,400,000 1,000,000 3,600,000
Equal Interests 1,200,000 1,200,000 1,200,000 3,600,000
Cash receipt (payment) - 200,000 (200,000) -
Journal Entry
A B C Totals
Actual Contributions 1,200,000 1,400,000 1,000,000 3,600,000
Required Capital Balances 1,200,000 1,200,000 1,200,000 3,600,000
Additional (Withdrawal) - (200,000) 200,000 -
B shall withdraw 200,000 from his initial contribution while C shall make an additional investment of
200,000.
PROBLEM 3
A B Partnership
Cash 500,000 30,000 530,000
Inventory (at NRV) 10,000 10,000
Land (at fair value) 600,000 600,000
Equipment (at NRV) 600,000 600,000
Total Assets 1,100,000 640,000 1,740,000
Less: Liabilities
Mortgage Payable (100,000) 100,000
Adjusted capital balances 1,100,000 540,000 1,640,000
2. BONUS METHOD
Journal Entry
A B C Partnership
Cash 600,000 800,000 400,000 1,800,000
Accounts Receivable 700,000 700,000
Inventory 900,000 900,000
Building 1,400,000 1,400,000
Accounts Payable (300,000) (300,000)
Net Contribution 1,300,000 1,900,000 1,300,000 4,500,000
Equal Interests 1,500,000 1,500,000 1,500,000 4,500,000
Cash receipt (payment) (200,000) 400,000 (200,000) -
Journal Entry
A B C Totals
Actual Contributions 1,300,000 1,900,000 1,300,000 4,500,000
Required Capital Balances 1,500,000 1,500,000 1,500,000 4,500,000
Additional (Withdrawal) 200,000 (400,000) 200,000 -
B shall withdraw 400,000 from his initial contribution while C & B shall make an additional investment of
200,000 each.