Soultion for Part B Part B (2020) a.On December 31, 2020 new partner D invests other assets into the partnership for a one-quarter ownership interest. An equal amount of capital is contributed by A, B, and C to make up the difference. At December 31, 2020, the partners' capital balances are as follows: A $200,000 B 180,000 C 190,000 $ 570,000 Fair value of other assets from D $50,000 b.Immediately after this, partner C withdraws from the partnership. She is paid in cash the balance in her capital account plus a bonus, contributed equally from the capital balances of A, B, and D. Bonus paid to C $ 18,000 Required 5Prepare necessary adjusting entries at December 31, 2020 to record the admission of partner D and the withdrawal of partner C. Show all calculations.

Pass necessary journal entry to record admission of partner.

Answered: Prepare necessary adjusting entries at…

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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Soultion for Part B

	Part B (2020)

a.	On December 31, 2020 new partner D invests other assets into the partnership for a one-quarter ownership interest. An equal amount of capital is contributed by A, B, and C to make up the difference. At December 31, 2020, the partners' capital balances are as follows:


	A		$200,000
	B		180,000
	C		190,000
			$ 570,000

	Fair value of other assets from D
	$50,000

b.	Immediately after this, partner C withdraws from the partnership. She is paid in cash the balance in her capital account plus a bonus, contributed equally from the capital balances of A, B, and D.


	Bonus paid to C	$ 18,000

	Required
5	Prepare necessary adjusting entries at December 31, 2020 to record the admission of partner D and the withdrawal of partner C. Show all calculations.

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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