The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: Tiger (40%) Phil (20%) Ernie (40%) Each of the following questions should be viewed independently. a. If Sergio invests $120,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. $ 95,000 65,000 80,000 b. If Sergio invests $90,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. c. If Sergio invests $108,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the goodwill method is used. Required A Required B Complete this question by entering your answers in the tabs below. No 1 Transaction 1 If Sergio invests $90,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Required C Cash Sergio, capital X Answer is not complete. Tiger, capital Phil, capital Ernie, capital Sergio, capital General Journal < Required A Required C ✓ X X > Debit 90,000 3,600 1,800 3,600 X X 33 Credit 90,000 X 9,000 X
The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: Tiger (40%) Phil (20%) Ernie (40%) Each of the following questions should be viewed independently. a. If Sergio invests $120,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. $ 95,000 65,000 80,000 b. If Sergio invests $90,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. c. If Sergio invests $108,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the goodwill method is used. Required A Required B Complete this question by entering your answers in the tabs below. No 1 Transaction 1 If Sergio invests $90,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Required C Cash Sergio, capital X Answer is not complete. Tiger, capital Phil, capital Ernie, capital Sergio, capital General Journal < Required A Required C ✓ X X > Debit 90,000 3,600 1,800 3,600 X X 33 Credit 90,000 X 9,000 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
100%
Transcribed Image Text:The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and
loss percentages:
Tiger (40%)
Phil (20%)
Ernie (40%)
Each of the following questions should be viewed independently.
a. If Sergio invests $120,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus
method is used.
b. If Sergio invests $90,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus
method is used.
c. If Sergio invests $108,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the
goodwill method is used.
$ 95,000
65,000
80,000
Required A
Complete this question by entering your answers in the tabs below.
No
Required B
1
If Sergio invests $90,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the
bonus method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account
field.)
Transaction
1
Required C
Cash
Sergio, capital
X Answer is not complete.
Tiger, capital
Phil, capital
Ernie, capital
Sergio, capital
General Journal
< Required A
Required C >
X
✓
X
×
Debit
90,000
3,600
1,800
3,600
Credit
90,000 X
9,000
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