The partnership of Barzini, Corleone, Stracci and Tataglia showed the following capital accounts as of December...

The partnership of Barzini, Corleone, Stracci and Tataglia showed the following capital accounts as of December 31, 2016:

partnership capital balances

barzini, capital 100,000

corleone, capital 125,000

stracci, capital 175,000

taattaglia, capital 250,000

total 650,000

Sollozzo contributes $150,000 into the partnership for a 20% interest. The four original partners share profits and losses according to the following ratio: 2:2:3:3. Using the bonus method:

determine the balances for each of the five partners after Sollozzo joins the partnership and

prepare a journal entry to record the entry of Sollozzo into the partnership. Use the templates provided below:

Expert Solution

Capital Balances of Partners After Admission

	Paid in Capital	Capital after Admission

Partner Barzini	100,000
Partner Carleone	125,000
Partner Stracci	175,000
Partner Taattaglia	250,000
Partner Sollozo	150,000	160,000	(800000*20%)

Total	800,000	800,000



When we use the bonus method , it means that the total paid in capital must equal the total capital after admission,
So it equals (800000)

The paid in capital of the new partner (150000) < his share in the capital after admission (160000 = 800000 * 20%)
so there is a bonus of 10000 (60000 – 50000) to the new partner(Solozzo).

The bonus will be allocated on a ratio of 2:2:3:3 and will be deducted from the old partners’ capital.

(Barzini) = 10000 *(2/10) = 2000

(Corleone) = 10000 * (2/10) = 2000

(Stracci) = 10000 * (3/10) = 3000

(Taattaglia) = 10000 * (3/10) = 3000

(Barzini’s capital after admission = 100000 - 2000 = 98000)

(Corleone’s capital after admission = 125000 - 2000 = 123000)

(Stracci’s capital after admission = 175000 - 3000 = 173000)

(Taattaglia’s capital after admission = 250000 - 3000 = 247000)

Solozzo’s capital after admission = 160000

ekkarill92 answered 1 year ago

The capital accounts of the Lee, Monroe and Newport partnership at December 31, 2018, together with...

The capital accounts of the Lee, Monroe and Newport partnership at December 31, 2018, together with profit and loss sharing ratios are as follows: Lee (20%) 130,000 Monroe (30%) 200,000 Newport (50%) 170,000 The partners agree to admit Olson into the partnership. REQUIRED: Prepare the journal entry or entries to admit Olson into the partnership under each of the following independent assumptions. Monroe and Newport sell 30% of each of their interests to Olson for $120,000 paid...

Problem 2 The capital accounts of the Lee, Monroe and Newport partnership at December 31, 2018,...

Problem 2 The capital accounts of the Lee, Monroe and Newport partnership at December 31, 2018, together with profit and loss sharing ratios are as follows: Lee (20%) 130,000 Monroe (30%) 200,000 Newport (50%) 170,000 The partners agree to admit Olson into the partnership. REQUIRED: Prepare the journal entry or entries to admit Olson into the partnership under each of the following independent assumptions. Monroe and Newport sell 30% of each of their interests to Olson for $120,000 paid directly to Monroe and...

Withdrawals from the partnership capital accounts are typically not used in which of the following situations?...

Withdrawals from the partnership capital accounts are typically not used in which of the following situations? Multiple Choice To reduce the partners' capital account balances at the end of an accounting period. To record interest earned on a partner's capital balance To reward partners for work performed in the business To reduce the basic investment that has been made in the business. To record the partnership's payment of a partner's personal expense such as income tax

After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts...

After the accounts are closed on April 10, prior to liquidating the partnership, the capital accounts of Zach Fairchild, Austin Lowes, and Amber Howard are $42,000, $7,500, and $36,500, respectively. Cash and noncash assets total $23,500 and $84,500, respectively. Amounts owed to creditors total $22,000. The partners share income and losses in the ratio of 1:1:2. Between April 10 and April 30, the noncash assets are sold for $48,500, the partner with the capital deficiency pays the deficiency to the...

The balance sheet of Flexor Company at December 31, 2004 showed the following: Cash, $4,200; Accounts...

The balance sheet of Flexor Company at December 31, 2004 showed the following: Cash, $4,200; Accounts Recievable, $10,300; Notes Recievable (Long Term), $23,000; Merchandise Inventory, $55,500; Prepaid insurance, $1,200; Notes Payable (short term), $20,000; Accounts Payable, $25,200; Current Portion of Long Term Debt, $8,000; Mortgage Payable, $80,200 How much was the working capital at December 31, 2004?

Carmen Company’s factory overhead account showed a $3,600 overapplied balance on December 31. Other accounts showed...

Carmen Company’s factory overhead account showed a $3,600 overapplied balance on December 31. Other accounts showed the following balances at year end: Raw materials $ 50,000 Work in Process 20,000 Finished Goods 30,000 Cost of Goods Sold 450,000 The company deems the overapplied overhead to be material in amount. How much is cost of goods sold after adjustment for the overapplied overhead? $453,240 $446,760 $453,600 $447,055

Canyon Tours showed the following components of working capital last year: Beginning End of Year Accounts...

Canyon Tours showed the following components of working capital last year: Beginning End of Year Accounts receivable $ 25,600 $ 23,800 Inventory 12,800 14,100 Accounts payable 15,300 18,100 a. What was the change in net working capital during the year? (A negative amount should be indicated by a minus sign.) b. If sales were $36,800 and costs were $24,800, what was cash flow for the year? Ignore taxes.

Accounting and Financial Reporting II On December 31, a partnership has total partnership capital as follows:...

Accounting and Financial Reporting II On December 31, a partnership has total partnership capital as follows: Partner #1, capital 100,000 Partner #2, capital 150,000 Partner #3, capital 200,000 Total partnership capital 450,000 The partners allocate income and losses 20% to partner #1, 30% to partner #2 and 50% to partner #3. On December 31, Partner #3 retires from the partnership and is paid $225,000 in PARTNERSHIP cash to settle his interest in the partnership. Prepare any necessary journal entries on...

On January 1st 2020 the PSST partnership had the following capital accounts: Schiff $510,000 Schumer $600,000...

On January 1st 2020 the PSST partnership had the following capital accounts: Schiff $510,000 Schumer $600,000 Pelosi $700,000 Trump $1,000,000 The partnership agreement states the following: Partners would receive 10% interest on their beginning of the year capital accounts Schiff receives a salary of $10,000 per year Trump receives a salary of $50,000 per year Pelosi takes $24000 per year out of her capital account for cosmetics Trump takes $30,000 per year out of his capital account for orange hair...

An aging analysis of Pharoah Company’s accounts receivable at December 31, 2020 and 2021, showed the...

An aging analysis of Pharoah Company’s accounts receivable at December 31, 2020 and 2021, showed the following: Accounts Receivable Number of Days Outstanding Estimated %Uncollectible 2021 2020 0–30 days 3% 126,000 155,000 31–60 days 7% 31,500 77,500 61–90 days 13% 63,000 46,500 Over 90 days 40% 94,500 31,000 Total $315,000 $310,000 Additional information: 1. At December 31, 2020, the unadjusted balance in Allowance for Doubtful Accounts was a credit of $6,200. 2. In 2021, $26,700 of accounts was written off...

Question