The capital accounts of Susan Yu and Ben Hardy have balances of $100,000 and $90,000 respectively. Ken Mahl and Jeff Wood are admitted to the partnership. Mahl buys one-fourth of Yu’s interest for $27,500 and 0ne-fifth of Hardy’s interest for $20,000. Wood contributes $ 35,000 to the partnership, for which he is to receive an ownership equity of $35,000. Journalize the entries to record the admission of (1) Mahl and (2) Wood. What are the capital balances of each partner after the admission pf the new partners?
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.
The capital accounts of Susan Yu and Ben Hardy have balances of $100,000 and $90,000 respectively. Ken Mahl and Jeff Wood are admitted to the partnership. Mahl buys one-fourth of Yu’s interest for $27,500 and 0ne-fifth of Hardy’s interest for $20,000. Wood contributes $ 35,000 to the partnership, for which he is to receive an ownership equity of $35,000.
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Journalize the entries to record the admission of (1) Mahl and (2) Wood.- What are the capital balances of each partner after the admission pf the new partners?
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