At September 30 of the current year, partners' capital balances and profit and loss ratios in NEW
Question:
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On October 1, NEWS Company is formed by admitting C. Santos to the partnership.
Instructions
Journalize the admission of C. Santos under each of the following independent assumptions:
(a) Santos purchases 25% of Nolan's ownership interest by paying Nolan $20,000 cash.
(b) Santos invests $80,000 for a 30% ownership interest.
(c) Santos invests $36,000 for a 30% ownership interest.
(d) How much would Santos have to invest in the partnership for a 30% ownership interest so there is no bonus to the existing partners or the new partner?
TAKING IT FURTHER
Why would the existing partners be willing to give a bonus to the new partner? Give an example of a situation where this might happen.
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
Step by Step Answer:
a Oct 1 A Nolan Capital 60000 25 15000 C Santos Capital 15000 b Oct 1 Cash 80000 A Nolan Capital 50 ...View the full answer
Accounting Principles
ISBN: 978-1119048473
7th Canadian Edition Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
