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Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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FindFindarrow_forward

Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 15, Problem 14MC
Textbook Problem
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Thandie and Marco are partners with capital balances of $60,000. They share profits and losses at 50%. Chris contributes $60,000 to the partnership for a 1/3 share. What amount should the partnership record as an individual bonus to each of the old partners?

A. $10,000

B. $7,000

C. $0

D. $5,000

To determine

Concept introduction:

Contribution by a partner in the partnership firm:

A partner may contribute cash or non cash assets into the partnership firm. In order to record the partner’s contribution, the contributed assets are debited, and partner’s capital account is credited with the total amount of the contribution made by the partner.

To calculate:

The amount of bonus for each of the old partner.

Explanation of Solution

The amount of T’s Capital Balance in the partnership is calculated as follows:

The existing Capital balance of each old partner for 50% capital is $60,000.

New partner is entering for 1/3rd capital for $60,000.

The new share of each partner shall be 1/3.

Thus, the total new capital shall be $120000+ $60000 = $180,000...

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Chapter 15 Solutions

Principles of Accounting Volume 1
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