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

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On December 31, the capital balances and income ratios in Sunland Company are as follows. Partner Capital Balance Income Ratio Trayer $ 64,500 50% Emig 35,000 30% Posada 34,500 20% (1) Each of the continuing partners agrees to pay $ 19,600 in cash from personal funds to purchase Posada’s ownership equity. Each receives 50% of Posada’s equity. (2) Emig agrees to purchase Posada’s ownership interest for $ 24,200 cash. (3) Posada is paid $ 37,700 from partnership assets, which includes a bonus to the retiring partner. (4) Posada is paid $ 25,780 from partnership assets, and bonuses to the remaining partners are recognized. Journalize the withdrawal of Posada under each of the following assumptions. If Emig’s capital balance after Posada’s withdrawal is $ 38,930, what were (1) the total bonus to the remaining partners and (2) the cash paid by the partnership to Posada?
AGF partnership begins its first year of operation with the following capital balances and profit and loss percentages: Able Capital $ 60,000 (20%) Green Capital $80,000 (30%) Frank Capital $ 100,000 (50%) Each partner is allocated interest of 5% on beginning capital balances. Green is allocated salary of $20,000 for the full year. Frank is allocated salary of $10,000 for the full year. Able is not allocated salary. Each partner has drawings of $30,000 in the first year. Assume that partnership net income in the first year is $300,000. What is the balance in Green’s capital account at the end of the year a. $104,400 b. $151,400 c. $181,400 d. $77,400 e. $154,400
On March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $23,400 in cash and merchandise inventory valued at $62,600. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $60,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow in the image below. The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $19,000 (Keene) and $24,000 (Wallace), and the remainder equally. The journal entries for both Keene and Wallace are also attached below. Prepare a balance sheet as of March 1, 20Y8, the date of formation of the partnership of Keene and Wallace.
The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: Jones, the managing partner, receives a bonus equal to 15 percent of the business’s profit. Each partner receives 14 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: Jones $ 100,000 King 200,000 Lane 300,000 The partnership earned $48,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.)
The A & B Partnership was established since 2005. On January 1, 2015, the partners agree to admit partner (C). Capital account balances and profit and loss sharing ratios at January 1, 2015, before the admission of partner (C), are as follows: Partner (A) (30%) $63,000 Partner (B) (70%) $97,000 Partner (C) invested $120,000 cash to the partners for 60% of capital interest and the partners agree about assets revaluation. The capital balance of partner B after admission is a. $82,000. a. $82,000. b. $78,000. b. $78,000. c. $91,000. c. $91,000. d. $97,000.
The partnership of Angel Investor Associates began operations on January 1, 20Y5, with contributions from two partners as follows: Dennis Overton $180,000 Ben Testerman 120,000 The following additional partner transactions took place during the year: In early January, Randy Campbell is admitted to the partnership by contributing $75,000 cash for a 20% interest. Net income of $150,000 was earned in 2015. In addition, Dennis Overton received a salary allowance of $40,000 for the year The three partners agree to an income-sharing ratio equal to their capital balances after admitting Campbell. The partners' withdrawals are equal to half of the increase in their capital balances from salary allowance and income. Prepare a statement of partnership equity for the year ended December 31, 20Y5.
On March 1, 20Y8, Eric Keene and Renee Wallace form a partnership. Keene agrees to invest $23,400 in cash and merchandise inventory valued at $62,600. Wallace invests certain business assets at valuations agreed upon, transfers business liabilities, and contributes sufficient cash to bring her total capital to $60,000. Details regarding the book values of the business assets and liabilities, and the agreed valuations, follow in the image below. The partnership agreement includes the following provisions regarding the division of net income: interest on original investments at 10%, salary allowances of $19,000 (Keene) and $24,000 (Wallace), and the remainder equally. Instructions Journalize the entries to record the investments of Keene and Wallace in the partnership accounts.
Allocation of bonus to Arun and Margot: Arun Margot C. $50,000 Total capital of Arun and Margot Investment by new partner, Tammy Total capital of new partnership Tammy's capital credit Total bonus to Arun and Margot Prepare the journal entries to show the resulting each of the three partners' capital accounts. If an amount box does not require an entry, leave it blank. A. B. C. %24 %24 %24 %24
Instructions The capital accounts of Jamie Dexter and Max Gee have balances of $400,000 and $250,000, respectively. Darcey Lind and Loren Rothman are to be admitted to the partnership. Darcey Lind buys one-fifth of Jamie Dexter's interest for $85,000 and one-fourth of Max Gee's interest for $65,000. Loren Rothman contributes $125,000 cash to the partnership, for which she is to receive an ownership equity of $125,000. a. On December 31, journalize the entries to record the admission of (1) Darcey Lind and (2) Loren Rothman. b. What are the capital balances of each partner after the admission of the new partners?
Manji
Aishah, Balan and Chong decided to enter into a partnership agreement as from 1 July 2019 with the following provisions: i . Aishah to contribute $20,000 cash, inventory the fair value of which was $42,500, plant and machinery $78,600, accounts receivable totalling $12,700. ii. Balan to contribute $37 500 cash and act as manager for the business at an annual salary of $32,000 to be allocated to him at the end of each year. iii. Chong to contribute $16,500 cash, land $120,000, premises $240,000, funiture and fittings $40,500, motor vehicles $31,500. A mortgage of $180.000 secured over the premises was outstanding and the partnership agreed to assume the mortgage. iv . Profits or losses of the firm are to be divided between or borne by Aishah, Balan and Chong in the proportion of 2:1:3 respectively. V. Interest to be allowed at 8% p.a. on the capital contribution by the partners. Interest at 10% p.a. to be charged on partners' drawings. During the year ended 30 June 2020, the…
6. Charlie McBride and Ian Jordan, who have ending capital balances of $90,000 and $40,000 respectively, agree to admit two new partners to their business on May 1, 20--. Paul Menendez will buy 30% of McBride's equity interest for $35,000 and 20% of Jordan's equity interest for $22,000. Alice Domski will invest $38,000 in the business for which sh will receive a $38,000 equity interest. Required: a. Prepare the journal entries showing the above transactions admitting Menendez and Domski to the partnership. GENERAL JOURNAL Page 1 Post Ref. Date Description Debit Credit