Question
A partnership of attorneys in the St. Louis, Missouri, area has the following balance sheet accounts as of January 1, 2015: Assets $ 410,000 Liabilities
A partnership of attorneys in the St. Louis, Missouri, area has the following balance sheet accounts as of January 1, 2015:
Assets | $ | 410,000 | Liabilities | $ | 126,000 |
Athos, capital | 108,000 | ||||
Porthos, capital | 98,000 | ||||
Aramis, capital | 78,000 | ||||
According to the articles of partnership, Athos is to receive an allocation of 50 percent of all partnership profits and losses while Porthos receives 30 percent and Aramis, 20 percent. The book value of each asset and liability should be considered an accurate representation of fair value. |
For each of the following independent situations, prepare the journal entry or entries to be recorded by the partnership. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
A. D'Artagnan is allowed to become a partner with a 16 percent ownership interest by contributing $60,000 in cash directly into the business. The entrance into the partnership is recorded by the goodwill method B. D'Artagnan is allowed to become a partner with a 16 percent ownership interest by contributing $38,000 in cash directly to the business. The goodwill method is used to record this transaction. (Round your answers to nearest whole dollar value.) |
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