The Prince-Robbins partnership has the following capital account balances on January 1, 2021: Prince, Capital Robbins, Capital $ 130,000 120,000 Prince is allocated 80 percent of all profits and losses with the remaining 20 percent assigned to Robbins after interest of 7 percent is given to each partner based on beginning capital balances. On January 2, 2021, Jeffrey invests $73,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction, 7 percent interest is still to go to each partner. Profits and losses will then be split as follows: Prince (50 percent), Robbins (30 percent), and Jeffrey (20 percent). In 2021, the partnership reports a net income of $23,000. a. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021. b. Prepare a schedule showing how the 2021 net income allocation to the partners should be determined.
The Prince-Robbins partnership has the following capital account balances on January 1, 2021: Prince, Capital Robbins, Capital $ 130,000 120,000 Prince is allocated 80 percent of all profits and losses with the remaining 20 percent assigned to Robbins after interest of 7 percent is given to each partner based on beginning capital balances. On January 2, 2021, Jeffrey invests $73,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction, 7 percent interest is still to go to each partner. Profits and losses will then be split as follows: Prince (50 percent), Robbins (30 percent), and Jeffrey (20 percent). In 2021, the partnership reports a net income of $23,000. a. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021. b. Prepare a schedule showing how the 2021 net income allocation to the partners should be determined.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Vaibhav
Subject: acounting
Transcribed Image Text:Required A Required B
Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021. (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
1 2
<
Record the entry for goodwill allocation, during the admission of a new partner.
Note: Enter debits before credits.
Transaction
1
General Journal
Debit
Credit
Transcribed Image Text:The Prince-Robbins partnership has the following capital account balances on January 1, 2021:
Prince, Capital
Robbins, Capital
$ 130,000
120,000
Prince is allocated 80 percent of all profits and losses with the remaining 20 percent assigned to Robbins after interest of 7 percent is
given to each partner based on beginning capital balances.
On January 2, 2021, Jeffrey invests $73,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the
goodwill method. After this transaction, 7 percent interest is still to go to each partner. Profits and losses will then be split as follows:
Prince (50 percent), Robbins (30 percent), and Jeffrey (20 percent). In 2021, the partnership reports a net income of $23,000.
a. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021.
b. Prepare a schedule showing how the 2021 net income allocation to the partners should be determined.
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