Question

In: Accounting

Gomez has a capital balance of $2,40,000 after adjusting assets to fair market value.

Gomez has a capital balance of $2,40,000 after adjusting assets to fair market value.Banks contributes $3,80,000 to receive a 60% interest in a new partnership with Gomez.Determine the amount and recipient of the partner bonus

Solutions

Expert Solution

Partnership : It is a type of company that is owned and managed by two or more people who invest and share earnings and losses in accordance with a predetermined ratio.

The newly admitted partner receives a bonus from the partnership firm since the new partner is anticipated to contribute to the business's net profits through his or her talent and the excess money paid to join the firm.

Calculation of amount and recipient of the partner bonus is as follows

Particulars Amount$
Equity of G 2,40,000
Bank's contribution 3,80,000
Total equity after admitting banks 6,20,000
Bank's equity interest x 60%
Bank's equity after admission 3,72,000
Bank's Contribution 3,80,000
Deduct : Bank's Equity after admission (3,72,000)
Bonus paid to Gomez $8,000

Therefore, Gomez received $8,000 as bonus

balaji rao answered 2 years ago
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