Lear is to become a partner in the WS partnership by paying $80,000 in cash to the business. At present, the capital balance for Hamlet is $70,000 and for MacBeth is $40,000. Hamlet and MacBeth share profits on a 7:3 basis. Lear is acquiring 40 percent of the new partnership. 1.If the goodwill method is applied, what will the three capital balances be following the payment by Lear? 2. If the bonus method is applied, what will the three capital balances be following the payment by Lear?
Lear is to become a partner in the WS partnership by paying $80,000 in cash to the business. At present, the capital balance for Hamlet is $70,000 and for MacBeth is $40,000. Hamlet and MacBeth share profits on a 7:3 basis. Lear is acquiring 40 percent of the new partnership. 1.If the goodwill method is applied, what will the three capital balances be following the payment by Lear? 2. If the bonus method is applied, what will the three capital balances be following the payment by Lear?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter14: Partnerships And Limited Liability Entities
Section: Chapter Questions
Problem 2BD
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Lear is to become a partner in the WS
1.If the
2. If the bonus method is applied, what will the three capital balances be following the payment by Lear?
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