Alex, Barnes, Caleb and Davis have the following partnership business:

The partners share profits and losses equally.

Liabilities and equities

Assets

Cash $55,000

Current assets 30,000

Land 205,000

Building and Equip't 110,000

Total assets $400,000

Liabilities and equities

Liabilities $40,000

Alex, capital 60,000

Barnes, capital 70,000

Caleb, capital 90,000

Davis, capital. 140,000

Total Liab. and Eq's. $400,000

The partners share profits and losses equally.

Provide the partners' ending capital balances in each of the following independent situations.

a. Eldridge is added to the partnership after contributing $90,000 to the business. No goodwill or bonus is recorded.

b. Eldridge contributes $100,000 in cash to the business and receives a 20% interest in the partnership. Eldridge's $100,000 investment is considered 20% of the new business's value, so goodwill may need to be recorded. (Eldridge's capital balance will be exactly $100,000.)

c. Eidridge is added to the partnership and receives 20% of each partner's interest in the business after paying $20,000 directly to each of the four partners. No goodwill is recorded.

d. Caleb retires and has been paid 120% of her capital balance according to the terms of the original partnership agreement. The bonus

method is used.