Ann, Bill, Carl and Dawn have the following partnership business: Assets Liabilities and equities Cash $40,000 $55,000 30,000 Liabilities Current assets Ann, capital Bill, capital Carl, capital Dawn, capital Total Liab. and Eq's 60,000 Land 205,000 70,000 90,000 Building and Equip't 110,000 $400,000 140,000 $400,000 Total assets The partners share profits and losses equally. Provide the partners' ending capital balances in each of the following independent situations. Elmore is added to the partnership after contributing $80,000 a. to the business. No goodwill or bonus is recorded. Elmore contributes $100,000 in cash to the business and receives a 20% interest in the partnership. Elmore's $100,000 investment is considered 20% of the new business's value, so goodwill may need to be b. recorded. (Elmore's capital balance will be exactly $100,000.) Elmore is added to the partnership and receives 20% of each partner's $39,000 directly to each of c. interest in the business after paying the four partners. No goodwill is recorded. d. Carl retires and has been paid 110% of his capital balance according to the tems of the original partnership agreement. The bonus method is used.
Ann, Bill, Carl and Dawn have the following partnership business: Assets Liabilities and equities Cash $40,000 $55,000 30,000 Liabilities Current assets Ann, capital Bill, capital Carl, capital Dawn, capital Total Liab. and Eq's 60,000 Land 205,000 70,000 90,000 Building and Equip't 110,000 $400,000 140,000 $400,000 Total assets The partners share profits and losses equally. Provide the partners' ending capital balances in each of the following independent situations. Elmore is added to the partnership after contributing $80,000 a. to the business. No goodwill or bonus is recorded. Elmore contributes $100,000 in cash to the business and receives a 20% interest in the partnership. Elmore's $100,000 investment is considered 20% of the new business's value, so goodwill may need to be b. recorded. (Elmore's capital balance will be exactly $100,000.) Elmore is added to the partnership and receives 20% of each partner's $39,000 directly to each of c. interest in the business after paying the four partners. No goodwill is recorded. d. Carl retires and has been paid 110% of his capital balance according to the tems of the original partnership agreement. The bonus method is used.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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part d
![Ann, Bill, Carl and Dawn have the following partnership business:
Assets
Liabilities and equities
Cash
$55,000
Liabilities
$40,000
Current assets
30,000
205,000
Ann, capital
Bill, capital
60,000
Land
70,000
Carl, capital
Dawn, capital
Total Liab. and Eq's
90,000
140,000
Building and Equip't
110,000
Total assets
$400,000
$400,000
The partners share profits and losses equally.
Provide the partners' ending capital balances in each of the following
independent situations.
a.
Elmore is added to the partnership after contributing
S80,000
to the business. No goodwill or bonus is recorded.
b.
Elmore contributes $100,000 in cash to the business and
receives a 20% interest in the partnership. Elmore's $100,000 investment is
considered 20% of the new business's value, so goodwill may need to be
recorded. (Elmore's capital balance will be exactly $100,000.)
c.
Elmore is added to the partnership and receives 20% of each partner's
$39,000 directly to each of
interest in the business after paying
the four partners. No goodwill is recorded.
d.
Carl retires and has been paid
110% of his capital balance
according to the terms of the original partnership agreement. The bonus
method is used.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F873c2619-dd4a-4755-9363-77a15fc595bc%2F9cec543d-c996-4919-bd67-f94a5888124a%2Fss8hjr7_processed.png&w=3840&q=75)
Transcribed Image Text:Ann, Bill, Carl and Dawn have the following partnership business:
Assets
Liabilities and equities
Cash
$55,000
Liabilities
$40,000
Current assets
30,000
205,000
Ann, capital
Bill, capital
60,000
Land
70,000
Carl, capital
Dawn, capital
Total Liab. and Eq's
90,000
140,000
Building and Equip't
110,000
Total assets
$400,000
$400,000
The partners share profits and losses equally.
Provide the partners' ending capital balances in each of the following
independent situations.
a.
Elmore is added to the partnership after contributing
S80,000
to the business. No goodwill or bonus is recorded.
b.
Elmore contributes $100,000 in cash to the business and
receives a 20% interest in the partnership. Elmore's $100,000 investment is
considered 20% of the new business's value, so goodwill may need to be
recorded. (Elmore's capital balance will be exactly $100,000.)
c.
Elmore is added to the partnership and receives 20% of each partner's
$39,000 directly to each of
interest in the business after paying
the four partners. No goodwill is recorded.
d.
Carl retires and has been paid
110% of his capital balance
according to the terms of the original partnership agreement. The bonus
method is used.
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