Admitting New Partner With Bonus Cody Jenkins and Lacey Tanner formed a partnership to provide landscaping services. Jenkins and Tanner shared profits and losses equally. After all the tangible assets have been adjusted to current market prices, the capital accounts of Cody Jenkins and Lacey Tanner have balances of $56,000 and $73,000, respectively. Valeria Solano has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Tanner deem these skills useful; thus, Solano is admitted to the partnership at a 30% interest for a purchase price of $35,000. a.  Determine the recipient and amount of the partner bonus.$   b.  Provide the journal entry to admit Solano into the partnership. For a compound transaction, if an amount box does not require an entry, leave it blank.                                 c.  Why would a bonus be paid in this situation? Apparently, Jenkins and Tanner value   offered by Solano.

Question

Admitting New Partner With Bonus

Cody Jenkins and Lacey Tanner formed a partnership to provide landscaping services. Jenkins and Tanner shared profits and losses equally. After all the tangible assets have been adjusted to current market prices, the capital accounts of Cody Jenkins and Lacey Tanner have balances of $56,000 and $73,000, respectively. Valeria Solano has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Tanner deem these skills useful; thus, Solano is admitted to the partnership at a 30% interest for a purchase price of $35,000.

a.  Determine the recipient and amount of the partner bonus.
$  

b.  Provide the journal entry to admit Solano into the partnership. For a compound transaction, if an amount box does not require an entry, leave it blank.

       
       
       
       

c.  Why would a bonus be paid in this situation?

Apparently, Jenkins and Tanner value   offered by Solano.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Distinguish between ratio analysis and percentage analysis relative to the interpretation of financi...

A: Financial statement: A record of financial activities and financial position of the company or an in...

Q: Cullen Construction Company, which began operations in 2020, changed from the completed-contract to ...

A: (a)Calculate amount of net income that would be reported in 2021:Net income = Income before income t...

Q: You have been hired as the new controller for the Ralston Company. Shortly after joining the company...

A: Inventory errorInventory errors are sometimes caused by making mistake in physical count, in pricing...

Q: A Type A lease agreement calls for annual lease payments of $26,269 over a six-year lease term, with...

A: Finance lease Sales type/Finance lease in parallel type of direct financing whereby the owner (lesso...

Q: Joe Dumars Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30...

A: Definition:

Q: What is reported in the discontinued operations section of the income statement?

A: Discontinued Operations: It is the second section after the continuing operations on the income stat...

Q: Classifying items on the indirect statement of cash flows Destiny Corporation is preparing its state...

A: Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalen...

Q: Mathys Inc. has recently hired a new independent auditor, Karen Ogleby, who says she wants “to get e...

A: a. Classify the given following.

Q: How does an “asset gain or loss” develop in pensionaccounting? How does a “liability gain or loss” d...

A: Plan assets: Assets which are created, maintained and planned for a specific purpose or benefit is t...

Q: Gordon Company started operations on January 1, 2015, and has used the FIFO method of inventory valu...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: Why didn’t the FASB cover both types of postretirementbenefits—pensions and healthcare—in the earlie...

A: Pension: A fixed sum of money, receivable in future or after the age of retirement, which the benefi...

Q: What approaches have been suggested to overcome the seasonality problem related to interim reporting...

A: Interim report: When the financial results are published for the year shorter than the fiscal year, ...

Q: Dominic Carbonne owns Hungry Henry’s pizza, a four-unit chain of take-out pizza shops in a city of 6...

A: Facts of the case:DC owns a chain of restaurants in the name of HH Pizzas. A new chain of restaurant...

Q: Penn Company is in the process of adjusting and correcting its books at the end of 2020. In reviewin...

A: Prepare the journal entries.

Q: Accounting question: If you are doing a balance sheet with notes payable of 96,600. Assuming 13,600 ...

A: Income statement.

Q: Flay Foods has always used the FIFO inventory costing method for both financial reporting and tax pu...

A: 1. Prepare journal entry to record the change in value of inventory value.

Q: Target prices, target costs, activity-based costing. Snappy Tiles is a small distributor of marble t...

A: 1.Calculate S's operating income for 2016.

Q: What type of disclosure or accounting do you believe is necessary for the following items? Because ...

A: 1. The increased likelihood of a company depicted to suffer losses due to strike in near future are ...

Q: Journalizing a large stock dividend Nelly, Inc. had 320,000 shares of $2 par value common stock issu...

A: The declaration of stock dividend will increase the dividend payable liability and decrease the reta...

Q: Cost of goods manufactured schedule (LO 3) Rocket Company produces small gasoline-powered engines fo...

A: Cost of Goods Manufactured Schedule It is used to compute the cost of producing products for a perio...

Q: Computing earnings per share HEB Corporation had net income for 2018 of $60,450. HEB had 15,500 shar...

A: Earnings per share: Earnings per share represent the amount of income earned per share of outstandin...

Q: Analyzing and journalizing bond transactions On January 1, 2018, Electricians Credit Union (ECU) iss...

A: 1.

Q: Value engineering, target pricing, and locked-in costs. Sylvan Creations designs, manufactures, and ...

A: Requirement 1:Determine the full target cost per unit and total target operating income. 

Q: Anti-trust laws and pricing. Global Airlines is a major low-price airline carrier for both domestic ...

A: Requirement 1:Determine the pricing policies of the company are violating the anti-trust laws or not...

Q: Strategy, balanced scorecard. Stanmore Corporation makes a special-purpose machine, D4H, used in the...

A: 1.The strategy of the company is of product differentiation. This can be said for the reasons as fol...

Q: In recent years, the Wall Street Journal has indicated that many companies have changed their accoun...

A: While preparing the financial statements of company, some genera rules & guidelines have to be f...

Q: Accounting for cash dividends Java Company earned a net income of $85,000 during the year ended Dece...

A: Prepare the journal entry for the given transaction.

Q: The November 2019 payroll of Walnut Company is $17,500,000, of which $2,150,000 is exempt from Socia...

A: Prepare the journal entries to record payroll expense.

Q: In January 2020, installation costs of $6,000 on new machinery were charged to Maintenance and Repai...

A: Depreciation: Depreciation expense is a non-cash expense, which is recorded on the income statement ...

Q: Strategic analysis of operating income (continuation of 12-33). Refer to Problem 12-33. As a result ...

A: As you have posted multiple questions, the solution to the first question is provided. Kindly repost...

Q: According to IAS 8, how should prior period errors that are discovered in a subsequent reporting per...

A:  

Q: You have been assigned to examine the financial statements of Zarle Company for the year ended Decem...

A: Click to see the answer

Q: What is treasury stock? What type of account is Treasury Stock, and what is the account’s normal bal...

A: Stock: It refers to a security issued in a form of certificate. It implies the right of ownership of...

Q: State how each of the following items is reflected in thefinancial statements.(a) Change from FIFO t...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: Hello! I need help with this problem. The first one is good, but the rest are wrong. Thank you for h...

A: Requirement 1: Compute the taxable income and after tax income of Kirsten.

Q: Value engineering, target pricing, and target costs. Westerly Cosmetics manufactures and sells a var...

A: Requirement 1:Determine the target cost of producing 400,000 units.

Q: Indicate whether each of the following is identified with (1) an asset, (2) a liability, or (3) owne...

A: Click to see the answer

Q: Jim Sandrolini is an accountant for a local manufacturing company. Jim's good friend, Dan Carruthers...

A: Accounting: Business ethics are business policies and practices which are made to conduct a business...

Q: A small stock dividend decreases common stock. has no effect on total equity. increases Retained Ea...

A: A Stock Dividend is the payment of dividends in the forms of shares of the company. In cash crunch s...

Q: American Food Services, Inc., leased a packaging machine from Barton and Barton Corporation. Barton ...

A: 1.Prepare the journal entry for American Food Services at the beginning of the lease on January 1, 2...

Q: At the beginning of a Type B lease, the lessee will record what asset and liability, if any?

A: Type B lease implies to the lease in which insignificant portion of the useful life of the asset is ...

Q: What does the statement of stockholders’ equity report? How does the statement of stockholders’ equi...

A: A financial statement is the complete record of financial transactions that take place in a company ...