Admission by a contribution made to the partnership

King Capital: 80,000

Wilson Capital: 20,000

P&L Ratio: K=60%; W=40%

G, a third entity, enters the partnership for a payment of $20,000. This money goes to the partnership and G gets 10% interest.

Calculate the capital balances of each entity after G enters the partnership.

1) Bonus Method

2) Goodwill Method

3) Hybrid Method

Next, calculate the capital balances of each entity if G gets 20% interest:

1) Bonus Method

2) Goodwill Method