The Prince-Robbins partnership has the following capital account balances on January 1, 2021: Prince, Capital Robbins, Capital $ 130,000 120,000 Prince is allocated 80 percent of all profits and losses with the remaining 20 percent assigned to Robbins after interest of 7 percent is given to each partner based on beginning capital balances. On January 2, 2021, Jeffrey invests $73,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction, 7 percent interest is still to go to each partner. Profits and losses will then be split as follows: Prince (50 percent), Robbins (30 percent), and Jeffrey (20 percent). In 2021, the partnership reports a net income of $23,000. a. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021. b. Prepare a schedule showing how the 2021 net income allocation to the partners should be determined.
The Prince-Robbins partnership has the following capital account balances on January 1, 2021: Prince, Capital Robbins, Capital $ 130,000 120,000 Prince is allocated 80 percent of all profits and losses with the remaining 20 percent assigned to Robbins after interest of 7 percent is given to each partner based on beginning capital balances. On January 2, 2021, Jeffrey invests $73,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction, 7 percent interest is still to go to each partner. Profits and losses will then be split as follows: Prince (50 percent), Robbins (30 percent), and Jeffrey (20 percent). In 2021, the partnership reports a net income of $23,000. a. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021. b. Prepare a schedule showing how the 2021 net income allocation to the partners should be determined.
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 20P
Related questions
Question
Vaibhav
Subject: acounting
Transcribed Image Text:Required A Required B
Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021. (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
1 2
<
Record the entry for goodwill allocation, during the admission of a new partner.
Note: Enter debits before credits.
Transaction
1
General Journal
Debit
Credit
Transcribed Image Text:The Prince-Robbins partnership has the following capital account balances on January 1, 2021:
Prince, Capital
Robbins, Capital
$ 130,000
120,000
Prince is allocated 80 percent of all profits and losses with the remaining 20 percent assigned to Robbins after interest of 7 percent is
given to each partner based on beginning capital balances.
On January 2, 2021, Jeffrey invests $73,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the
goodwill method. After this transaction, 7 percent interest is still to go to each partner. Profits and losses will then be split as follows:
Prince (50 percent), Robbins (30 percent), and Jeffrey (20 percent). In 2021, the partnership reports a net income of $23,000.
a. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021.
b. Prepare a schedule showing how the 2021 net income allocation to the partners should be determined.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College