Herbert and Ireneo are partners sharing profits and losses in the ratio of 60% and 40% respectively. The partnership balance sheet at August 30, 2016 follows: Cash $ 12,150 Other assets 119,700 Ireneo, Loan 9,000 Total $ 140,850 Accounts Payable $ 13,500 Herbert, Loan 5,850 Herbert, capital 81,000 Ireneo, capital 40,500 Total $ 140,850 At this date, Joshua was admitted as a partner for a consideration of $43,875 cash for a 40% interest in capital and in profits. Required: 1. Assume Joshua is admitted by purchase of 40% each of the original partners' interest: A. Prepare the journal entry to record the admission of Joshua. B. Calculate the amounts received by Herbert and Ireneo for their respective partnership interest transferred to Joshua. 2. Assume Joshua is admitted by investing the $43,875 to the partnership: a. Prepare the entry for the admission of Joshua.
Herbert and Ireneo are partners sharing profits and losses in the ratio of 60% and 40% respectively. The partnership balance sheet at August 30, 2016 follows: Cash $ 12,150 Other assets 119,700 Ireneo, Loan 9,000 Total $ 140,850 Accounts Payable $ 13,500 Herbert, Loan 5,850 Herbert, capital 81,000 Ireneo, capital 40,500 Total $ 140,850 At this date, Joshua was admitted as a partner for a consideration of $43,875 cash for a 40% interest in capital and in profits. Required: 1. Assume Joshua is admitted by purchase of 40% each of the original partners' interest: A. Prepare the journal entry to record the admission of Joshua. B. Calculate the amounts received by Herbert and Ireneo for their respective partnership interest transferred to Joshua. 2. Assume Joshua is admitted by investing the $43,875 to the partnership: a. Prepare the entry for the admission of Joshua.
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...
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Herbert and Ireneo are partners sharing profits and losses in the ratio of 60% and 40% respectively. The partnership balance sheet at August 30, 2016 follows:
Cash $ 12,150
Other assets 119,700
Ireneo, Loan 9,000
Total $ 140,850
Accounts Payable $ 13,500
Herbert, Loan 5,850
Herbert, capital 81,000
Ireneo, capital 40,500
Total $ 140,850
At this date, Joshua was admitted as a partner for a consideration of $43,875 cash for a 40% interest in capital and in profits.
Required:
1. Assume Joshua is admitted by purchase of 40% each of the original partners' interest:
A. Prepare the journal entry to record the admission of Joshua.
B. Calculate the amounts received by Herbert and Ireneo for their respective partnership interest transferred to Joshua.
2. Assume Joshua is admitted by investing the $43,875 to the partnership:
a. Prepare the entry for the admission of Joshua.
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