Talent, a local HR consulting firm, has total partners’ equity of $794,000, which is made up of Hall, Capital, $617,000, and Reynolds, Capital, $177,000. The partners share profit/(losses) in a ratio of 80% to Hall and 20% to Reynolds. On July 1, Morris is admitted to the partnership and given a 20% interest in equity. Required: Prepare the journal entry to record the admission of Morris under each of the following unrelated assumptions, in which Morris invests cash of: a. $198,500 b. $247,000 c. $127,000
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is 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, drawings of a partner, etc.
Talent, a local HR consulting firm, has total partners’ equity of $794,000, which is made up of Hall, Capital, $617,000, and Reynolds, Capital, $177,000. The partners share
Required:
Prepare the
a. $198,500
b. $247,000
c. $127,000
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