
Concept Introduction:
In partnership firm, the new person can also join as a partner and and the existing partner can also leave the firm with mutual consent. When a person joins or leaves the partnership deed is amended and partner’s capital account is adjusted as per agreed terms and conditions.
Requirement-1:
To prepare:
In the question, there are three partners: Gibbs, Hook and Chan. Gibbs is retiring from the firm and we have to prepare
- Gibbs sells her partnership interest to Brady for 250,000 and brady is admitted in the firm as new partner.
- Gibbs daughter in law Kannon is admitted into firm in place of Gibbs.
- Gibbs get 606,000 in cash for her capital.
- Gibbs get 350,000 in cash for her capital
- Gibbs get 200,000 in cash and equipment which book value is 538,000 and
accumulated depreciation is 336,000
Requirement-2:
To prepare:
We have to record journal entries if Mr. Chip is admitted into partnership firm with 20% equity and his investment is under three different scenarios:
- If Chip investment is 300,000
- If Chip investment is 196,000
- If Chip investment is426,000

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Chapter 12 Solutions
Fundamental Accounting Principles -Hardcover
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