# 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 $78,000 and$46,000, 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 $32,000. a. Determine the recipient and amount of the partner bonus. b. Provide the journal entry to admit Solano into the partnership. c. Why would a bonus be paid in this situation? BuyFind ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 BuyFind ### Accounting 27th Edition WARREN + 5 others Publisher: Cengage Learning, ISBN: 9781337272094 #### Solutions Chapter Section Chapter 12, Problem 12.12EX Textbook Problem ## Admitting new partner with bonusCody 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$78,000 and $46,000, 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$32,000. a. Determine the recipient and amount of the partner bonus. b. Provide the journal entry to admit Solano into the partnership. c. Why would a bonus be paid in this situation?

Expert Solution

a.

To determine

Partnership

It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

To determine:  The amount of partner bonus.

### Explanation of Solution

The calculation of the partner’s bonus is as follows:

1. Capital balances of partner J and T after Revaluation-

 J T Total Capital balances after revaluation $78,000$46,000 $124,000 Table (1) 2. Calculation of S’s equity @ 30%- ...  Total equity balance after revaluation (A)$124,000 Contributed by S (B) \$32,000
Expert Solution

b.

To determine

To record:  The journal entry for the admission of S

Expert Solution

c.

To determine

To explain: The reason for which bonus is paid now.

### Want to see the full answer?

Check out a sample textbook solution.See solution

### Want to see this answer and more?

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

See solution