Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

At April 30, partners' capital balances in Sunland Company are G. Donley $48,880, C. Lamar $45,120, and J. Pinkston $16,920. The income sharing ratios are

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

At April 30, partners' capital balances in Sunland Company are G. Donley $48,880, C. Lamar $45,120, and J. Pinkston $16,920. The income sharing ratios are 5:4:1, respectively. On May 1 , the PDLT Company is formed by admitting J. Terrell to the firm as a partner. (a) Journalize the admission of Terrell under each of the following independent assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.) (1) Terrell purchases 50% of Pinkston's ownership interest by paying Pinkston $15,040 in cash. (2) Terrell purchases 331/3% of Lamar's ownership interest by paying Lamar $14,100 in cash. (3) Terrell invests $58,280 for a 30% ownership interest, and bonuses are given to the old partners. (4) Terrell invests $39,480 for a 30% ownership interest, which includes a bonus to the new partner. No. Account Titles and Explanation Debit Credit 1. J. Pinkston, Capital J. Terrell, Capital 2. C. Lamar, Capital J. Terrell, Capital 3. 4. 4. Lamar's capital balance is $30,080 after admitting Terrell to the partnership by investment. If Lamar's ownership interest is 20% of total partnership capital, what were (1) Terrell's cash investment and (2) the bonus to the new partner? (1) Terrell's cash investment (2) Bonus to new partner

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Bev Vickerstaff, Parminder Johal

1st Edition

1444170414, 978-1444170412

More Books

Students also viewed these Accounting questions