Admitting New Partners Jeff Bowman and Kristi Emery, who have ending capital balances of $104,000 and $63,000, respectively, agree to admit two new partners to their business on August 18, 20--. Dan Bridges will buy one-fifth of Bowman's capital interest for $30,800 and one- fourth of Emery's capital interest for $32,000. Payments will be made directly to the partners. Anna Terrell will invest $62,800 in the business, for which she will receive a $62,800 capital interest. 1. Prepare general journal entries showing the transactions admitting Bridges and Terrell to the partnership. Page: 1 DOC. POST. DATE ACCOUNT TITLE DEBIT CREDIT NO. REF. 20-- Aug. 18 3 5 Aug. 18 7. 2. Calculate the ending capital balances of all four partners after the transactions. Ending Capital Balances 3. Bowman K. Emery D. Bridges A. Terrell
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
