The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: Tiger (50%) Phil (40%) Ernie (10%) Each of the following questions should be viewed independently. Required: a. If Sergio invests $60,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus method is used. $ 70,000 40,000 55,000 b. If Sergio invests $50,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus method is used. c. If Sergio invests $60,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used. Complete this question by entering your answers in the tabs below. Required A Required R Required C
The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: Tiger (50%) Phil (40%) Ernie (10%) Each of the following questions should be viewed independently. Required: a. If Sergio invests $60,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus method is used. $ 70,000 40,000 55,000 b. If Sergio invests $50,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus method is used. c. If Sergio invests $60,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used. Complete this question by entering your answers in the tabs below. Required A Required R Required C
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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 (50%)
Phil (40%)
Ernie (10%)
Each of the following questions should be viewed independently.
Required:
a. If Sergio invests $60,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus
method is used.
b. If Sergio invests $50,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus
method is used.
c. If Sergio invests $60,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill
method is used.
$ 70,000
40,000
55,000
Complete this question by entering your answers in the tabs below.
Required A Required B
View transaction list
If Sergio invests $60,000 in cash in the business for a 25 percent interest, what journal entry recorded? Assume tha
method is used.
the bonus
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Required C
Journal entry worksheet
< 1
Record the admission of new partner under bonus method.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
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