9. William desires to purchase a one-fourth capitaland profit and loss interest in the partnership of Eli,George, and Dick. The three partners agree to sellWilliam one-fourth of their respective capital andprofit and loss interests in exchange for a totalpayment of $40,000. The capital accounts and therespective percentage interests in profits and lossesimmediately before the sale to William follow:PercentageInterests inСаpitalProfits and Losses60%EliGeorgeDickАссоunts$80,00040,00020.000$140,00030%10%100%TotalAll other assets and liabilities are fairly valued andimplied goodwill is to be recorded prior to theacquisition by William. Immediately after William'sacquisition, what should be the capital balances ofEli, George, and Dick, respectively?a. $60,000; $30,000; $15,000.b. $69,000; $34,500; $16,500.c. $77,000; $38,500; $19,500.d. $92,000; $46,000; $22,000.

Partnership is a form of doing the business in which two or more than two persons joining hands…

All other assets and liabilities are fairly valued and implied goodwill is to be recorded prior to the acquisition by William. Immediately after William's acquisition, what should be the capital balances of Eli, George, and Dick, respectively?

All other assets and liabilities are fairly valued and implied goodwill is to be recorded prior to the acquisition by William. Immediately after William's acquisition, what should be the capital balances of Eli, George, and Dick, respectively?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

9. William desires to purchase a one-fourth capital
and profit and loss interest in the partnership of Eli,
George, and Dick. The three partners agree to sell
William one-fourth of their respective capital and
profit and loss interests in exchange for a total
payment of $40,000. The capital accounts and the
respective percentage interests in profits and losses
immediately before the sale to William follow:
Percentage
Interests in
Саpital
Profits and Losses
60%
Eli
George
Dick
Ассоunts
$80,000
40,000
20.000
$140,000
30%
10%
100%
Total
All other assets and liabilities are fairly valued and
implied goodwill is to be recorded prior to the
acquisition by William. Immediately after William's
acquisition, what should be the capital balances of
Eli, George, and Dick, respectively?
a. $60,000; $30,000; $15,000.
b. $69,000; $34,500; $16,500.
c. $77,000; $38,500; $19,500.
d. $92,000; $46,000; $22,000.

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