Brenda, Clinton, Brad, and Linda have the following partnership business: Assets Liabilities and equities $45,000 Cash Liabilities $30,000 Current assets 20,000 Brenda. Capital 50,000 Land 205,000 Clinton, Capital 70,000 90,000 Building and Equip't 110,000 Brad, Capital Linda, Capital 140,000 Total assets $380,000 Total Liab. and Eq's $380,000 The partners share profits and losses equally. Provide the partners' ending capital balances in each of the following independent situations. Lee is added to the partnership after contributing $70,000 a. to the business. No goodwill or bonus is recorded. b. Lee contributes $100,000 in cash to the business and receives a 20% interest in the partnership. Lee $100,000 investment is considered 20% of the new business's value, so goodwill may need to be recorded. (Eldridge's capital balance will be exactly $100,000.) c. interest in the business after paying Lee is added to the partnership and receives 20% of each partner's $45.000 directly to each of the four partners. No goodwill is recorded. d. Lee retires and has been paid 110% of her capital balance according to the terms of the original partnership agreement. The bonus method is used.

Brenda, Clinton, Brad, and Linda have the following partnership business: Assets Liabilities and equities $45,000 Cash Liabilities $30,000 Current assets 20,000 Brenda. Capital 50,000 Land 205,000 Clinton, Capital 70,000 90,000 Building and Equip't 110,000 Brad, Capital Linda, Capital 140,000 Total assets $380,000 Total Liab. and Eq's $380,000 The partners share profits and losses equally. Provide the partners' ending capital balances in each of the following independent situations. Lee is added to the partnership after contributing $70,000 a. to the business. No goodwill or bonus is recorded. b. Lee contributes $100,000 in cash to the business and receives a 20% interest in the partnership. Lee $100,000 investment is considered 20% of the new business's value, so goodwill may need to be recorded. (Eldridge's capital balance will be exactly $100,000.) c. interest in the business after paying Lee is added to the partnership and receives 20% of each partner's $45.000 directly to each of the four partners. No goodwill is recorded. d. Lee retires and has been paid 110% of her capital balance according to the terms of the original partnership agreement. The bonus method is used.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1EB: The partnership of Michelle, Amal, and Maureen has done well. The three partners have shared profits...

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