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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.

FINANCIAL ACCOUNTING
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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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.
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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