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 $60,000 and $78,000, 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 $37,000. a. Determine the recipient and amount of the partner bonus. Valeria Solano ✓ Feedback Check My Work a.Determine the total capital, including the new contribution. Calculate the new partners' share of the total capital. If the new partner's contribution exceeds his share of the capital, the bonus goes to the current partners. If the new partner's share of the capital exceeds the contribution, the bonus goes to the new partner. b. Provide the journal entry to admit Solano into the partnership. If an amount box does not require an entry, leave it blank. Cash Cody Jenkins, Capital Lacey Tanner, Capital Valeria Solano, Capital ✓ ✓

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 $60,000 and $78,000, 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 $37,000.
a. Determine the recipient and amount of the partner bonus.
$
Valeria Solano
Feedback
Check My Work
a.Determine the total capital, including the new contribution. Calculate the new partners' share of the total capital. If the new partner's contribution exceeds his share of the capital, the
bonus goes to the current partners. If the new partner's share of the capital exceeds the contribution, the bonus goes to the new partner.
b. Provide the journal entry to admit Solano into the partnership. If an amount box does not require an entry, leave it blank.
Cash
Cody Jenkins, Capital
Lacey Tanner, Capital
Valeria Solano, Capital
Transcribed Image Text: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 $60,000 and $78,000, 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 $37,000. a. Determine the recipient and amount of the partner bonus. $ Valeria Solano Feedback Check My Work a.Determine the total capital, including the new contribution. Calculate the new partners' share of the total capital. If the new partner's contribution exceeds his share of the capital, the bonus goes to the current partners. If the new partner's share of the capital exceeds the contribution, the bonus goes to the new partner. b. Provide the journal entry to admit Solano into the partnership. If an amount box does not require an entry, leave it blank. Cash Cody Jenkins, Capital Lacey Tanner, Capital Valeria Solano, Capital
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