At April 30, partners’ capital balances in Crane Company are G. Donley $ 54,080, C. Lamar $ 49,920, and J. Pinkston $ 18,720. The income sharing ratios are 5 : 4 : 1, respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm as a partner. (1) Terrell purchases 50% of Pinkston’s ownership interest by paying Pinkston $ 16,640 in cash. (2) Terrell purchases 331/3% of Lamar’s ownership interest by paying Lamar $ 15,600 in cash. (3) Terrell invests $ 64,480 for a 30% ownership interest, and bonuses are given to the old partners. (4) Terrell invests $ 43,680 for a 30% ownership interest, which includes a bonus to the new partner. Journalize the admission of Terrell under each of the following independent assumptions.
At April 30, partners’ capital balances in Crane Company are G. Donley $ 54,080, C. Lamar $ 49,920, and J. Pinkston $ 18,720. The income sharing ratios are 5 : 4 : 1, respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm as a partner. (1) Terrell purchases 50% of Pinkston’s ownership interest by paying Pinkston $ 16,640 in cash. (2) Terrell purchases 331/3% of Lamar’s ownership interest by paying Lamar $ 15,600 in cash. (3) Terrell invests $ 64,480 for a 30% ownership interest, and bonuses are given to the old partners. (4) Terrell invests $ 43,680 for a 30% ownership interest, which includes a bonus to the new partner. Journalize the admission of Terrell under each of the following independent assumptions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
At April 30, partners’ capital balances in Crane Company are G. Donley $ 54,080, C. Lamar $ 49,920, and J. Pinkston $ 18,720. The income sharing ratios are 5 : 4 : 1, respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm as a partner.
| (1) | Terrell purchases 50% of Pinkston’s ownership interest by paying Pinkston $ 16,640 in cash. | |
| (2) | Terrell purchases 331/3% of Lamar’s ownership interest by paying Lamar $ 15,600 in cash. | |
| (3) | Terrell invests $ 64,480 for a 30% ownership interest, and bonuses are given to the old partners. | |
| (4) | Terrell invests $ 43,680 for a 30% ownership interest, which includes a bonus to the new partner. |
Journalize the admission of Terrell under each of the following independent assumptions.
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