Concept explainers
acalculation of amount to be invested by new partner
Admission of partner:changes in the membership of partnership occurs with the addition of new partners or disassociation of present partners. New partners are often a brings additional capital or needed expertise. A new partner can only be admitted with unanimous approval of all the existing partners, further public announcements are made about admission of partner. Section 306 of Uniform partnership act UPA 1997 states that a new partners are not liable for any liability incurred before new partners admitted. Thus, a new partner can be charged for partnership liabilities of existing partnership to the extent of capital contribution at the time of admission.
Requirement 1
the amount to be invested by E for one-third interest, when no
bJournal entry for admission of new partner
Admission of partner:changes in the membership of partnership occurs with the addition of new partners or disassociation of present partners. New partners are often a brings additional capital or needed expertise. A new partner can only be admitted with unanimous approval of all the existing partners, further public announcements are made about admission of partner. Section 306 of Uniform partnership act UPA 1997 states that a new partners are not liable for any liability incurred before new partners admitted. Thus, a new partner can be charged for partnership liabilities of existing partnership to the extent of capital contribution at the time of admission.
Requirement 2
the
cJournal entry for admission with given investment.
Admission of partner:changes in the membership of partnership occurs with the addition of new partners or disassociation of present partners. New partners are often a brings additional capital or needed expertise. A new partner can only be admitted with unanimous approval of all the existing partners, further public announcements are made about admission of partner. Section 306 of Uniform partnership act UPA 1997 states that a new partners are not liable for any liability incurred before new partners admitted. Thus, a new partner can be charged for partnership liabilities of existing partnership to the extent of capital contribution at the time of admission.
Requirement 3
the journal entry for admission of E if she invests $200,000 for 20 percent, and partner uses bonus method.
dliability of new partner’s for partnerships obligations prior to admission
Admission of partner:changes in the membership of partnership occurs with the addition of new partners or disassociation of present partners. New partners are often a brings additional capital or needed expertise. A new partner can only be admitted with unanimous approval of all the existing partners, further public announcements are made about admission of partner. Section 306 of Uniform partnership act UPA 1997 states that a new partners are not liable for any liability incurred before new partners admitted. Thus, a new partner can be charged for partnership liabilities of existing partnership to the extent of capital contribution at the time of admission.
Requirement 4
the new partner’s obligation on liabilities existed prior to admission of new partner
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Chapter 15 Solutions
Advanced Financial Accounting
- Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammys admission are $50,000 each. Prepare a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is: A. $20,000 B. $80,000 C. $50,000. In addition, show the resulting journal entries to each of the three partners capital accounts.arrow_forwardThe partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.arrow_forwardThe partnership of Arun, Margot, and Tammy has been doing well. Arun wants to retire and move to another state for a once-in-a-lifetime opportunity. The partners capital balances prior to Aruns retirement are $60,000 each. Prepare a schedule showing how Aruns withdrawal should be divided assuming his buyout is: A. $70,000 B. $45,000 C. $60,000. In addition, show the resulting entries to the capital accounts of each of the three.arrow_forward
- The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.arrow_forwardThe partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partners new agreement will share profit and loss in a 1:3 ratio.arrow_forwardJuan contributes marketable securities to a partnership. The book value of the securities is $7,000 and they have a current market value of $10,000. What amount should the partnership record in Juans Capital account due to this contribution? A. $10,000 B. $7,000 C. $3,000 D. none of the abovearrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT