The balance sheet of the Can-Yu Partnership at December 31, 20X5, appears below: Can and Yu share

Question:

The balance sheet of the Can-Yu Partnership at December 31, 20X5, appears below:

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Can and Yu share profits and losses in the ratio 30:70. On January 1, 20X6. Sea was admitted into the partnership.

\section*{Required}
Prepare journal entries for the admission of Sea for each of the following independent situations.

a. Sea acquired a 25 percent interest in partnership capital directly from Can and Yu for $\$ 50,000$. Sea paid $\$ 18,750$ directly to Can and $\$ 31,250$ directly to Yu. Total assets of the partnership after the admission of Sea were $\$ 360,000$.

b. Assume the same facts as in Required part $a$ except that total assets of the partnership were $\$ 410,000$ after the admission of Sea. At January 1, 20X6, inventories had a fair value of $\$ 85,000$, while property, plant, and equipment (net) had a fair value of $\$ 265,000$. Both Can and Yu decided to revalue the partnership's assets before the admission of Sea.

c. Sea acquired a 25 percent interest in capital by investing $\$ 50,000$ of cash into the partnership. Total capital of the Can-Yu-Sea Partnership on January 1, 20X6, amounted to $\$ 200,000$.

d. Sea acquired a 25 percent interest in capital by investing $\$ 80,000$ of cash into the partnership. Total capital of the Can-Yu-Sea Partnership on January 1, 20X6, amounted to $\$ 230,000$.
$e$. Assume the same facts as in Required part $d$ except that total capital of the Can-Yu-Sea Partnership after Sea's admission amounted to $\$ 320,000$ due to the recognition of goodwill.

f. Assume the same facts as in Required part $d$ except that total capital of the Can-Yu-Sea Partnership after Sea's admission amounted to $\$ 320,000$. The fair value of the inventories was $\$ 85,000$ and the fair value of the property, plant, and equipment (net) was $\$ 305,000$ on January $1,20 \times 6$.
g. Sea acquired a 25 percent interest in capital by investing $\$ 30,000$ of cash into the partnership. Total capital after Sea's admission amounted to $\$ 180,000$.
h. Assume the same facts as in Required part $g$ except that total capital of the Can-Yu-Sea Partnership after Sea's admission amounted to $\$ 200,000$ due to the recognition of goodwill.
i. Assume the same facts as in Required part $g$ except that total capital of the Can-Yu-Sea Partnership after Sea's admission amounted to $\$ 120,000$. The fair value of the inventories was $\$ 65,000$ and the fair value of the property, plant, and equipment (net) was $\$ 175,000$ on January 1. $20 \times 6$.

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