ASAP!

Problem 1.

lets consider the case of new partners being admitted to the partnership by paying cash (or other contributions) to the partnership itself.

Suppose that we have the following capital balances relating to a partnership:

Partner Capital Balance Profit/Loss Ratio

A $ 40,000 50%

B $ 40,000 25%

C $ 20,000 25%

$100,000

Partner D pays $40,000 to the partnership for a 20% interest. The profit/loss ratios are used in adjusting the Capital accounts.

1. the bonus method no revaluation of assets/liabilities?
2. the goodwill method revaluation of assets/liabilities?
3. comparison of bonus and goodwill methods?