Question
In: Accounting
In the GMP partnership (to which Elan seeks admittance), the capital balances of Mary, Gene, and...
|
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 | $ | 273,600 | |
| Gene | 136,800 | ||
| Pat | 45,600 | ||
| Required: |
| a. |
If no goodwill or bonus is recorded, how much must Elan invest for a one-third interest? (Do not round intermediate calculations.) |
| b. |
Prepare journal entry for the admission of Elan if she invests $80,500 for a 20 percent interest and goodwill is recorded. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) |
| c. |
Prepare journal entry for the admission of Elan if she invests $201,000 for a 20 percent interest. Total capital will be $657,000; the partners use the bonus method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) |
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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According to the articles of partnership, all profits will be
assigned as follows:
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following capital balances:
Winston, Capital
$
56,000
Durham, Capital
46,000
Salem, Capital
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assigned as follows:
Winston will be awarded an annual salary of $16,000 with $8,000
assigned to Salem.
The partners will be attributed interest equal to 10 percent of
the capital balance as of the first day of the year.
The remainder will be assigned on a 5:2:3...
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According to the articles of partnership, all profits will be
assigned as follows:
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assigned to Salem.
The partners will be attributed interest equal to 10 percent of
the capital balance as of the first day of the year.
The remainder will be assigned on a 5:2:3...
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Salem, Capital
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According to the articles of partnership, all profits will be
assigned as follows:
Winston will be awarded an annual salary of $10,000 with $5,000
assigned to Salem.
The partners will be attributed interest equal to 10 percent of
the capital balance as of the first day of the year.
The remainder will be assigned on a 5:2:3...
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