The E.N.D. partnership has the following capital balances as of the end of the current year: Pineda $ 200,000 Adams 180,000 Fergie 170,000 Gomez 160,000 Total capital $ 710,000 Answer each of the following independent questions: Required: Assume that the partners share profits and losses 3:3:2:2, respectively. Fergie retires and is paid $194,000 based on the terms of the original partnership agreement. If the goodwill method is used, what is the capital balance of the remaining three partners? Assume that the partners share profits and losses 4:3:2:1, respectively. Pineda retires and is paid $310,000 based on the terms of the original partnership agreement. If the bonus method is used, what is the capital balance of the remaining three partners? Note: Do not round your intermediate calculations. Round your final answers to the nearest dollar amounts.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter15: Partnership Accounting
Section: Chapter Questions
Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...
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The E.N.D. partnership has the following capital balances as of the end of the current year:

Pineda $ 200,000
Adams 180,000
Fergie 170,000
Gomez 160,000
Total capital $ 710,000

Answer each of the following independent questions:

Required:

  1. Assume that the partners share profits and losses 3:3:2:2, respectively. Fergie retires and is paid $194,000 based on the terms of the original partnership agreement. If the goodwill method is used, what is the capital balance of the remaining three partners?

  2. Assume that the partners share profits and losses 4:3:2:1, respectively. Pineda retires and is paid $310,000 based on the terms of the original partnership agreement. If the bonus method is used, what is the capital balance of the remaining three partners?

    Note: Do not round your intermediate calculations. Round your final answers to the nearest dollar amounts.

 
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