Adam (A), Betsy (B) and Cathy (C) decided to form a partnership, which was founded on 01/01/2015. Adam contributed cash $20,000 and inventory with market value of $30,000. B contributed a piece of land with market value of $80,000 with unpaid mortgage in the amount of $30,000. C contributed PPE with market value of $50,000 and Cs expertise is deemed to be worth of $50,000 by all the 3 partners.

*Assuming that every year the profit among different partners will be shared in the ration of 10%, 30% and 60%, and partners have to retain 75% of their share profits in the partnership in the case of profit. What are the balances of each partners capital by the end of each year using both goodwill and bonus method (2015 and 2016)

a. The partnership made $10,000 in 2015 and had a loss of $20,000 in 2016 (Goodwill method) (5 points).

b. The partnership made $15,000 in 2015 and had a loss of $25,000 in 2016 (bonus method) (5 points).

** The snapshot is additional information if needed

LTE $20,000 S30,000 To Adam Capita.Cr S50,000 Land 80,000 To Betsy To Loan A/c....Cr. S50,000 S30,000 S50,000 Goodwill A S50,000 To Cathy A S100,000 The respective capital against all partners is as follows: 1. Adam $50,000 2. Betsy S50,000. 3. Cathy S100,000 First two entries will be same. 3rd entry will be as below PPE S50,000 Goodwill A S50,000 To Cathy Capital A/c. S50,000 To Capital Reserve S50,000 The capital of all partners shall be S50,000 each