"At the start of 2010, Adriana Lopez is considering adding a partner to her business. She envisions the new partner taking the lead in generating sales of both services and merchandise for Success Systems. Lopez?s equity in Success Systems as of January 1, 2010, is reflected in the following capital balance. A. Lopez, Capital?????? $90,148 Required 1. Lopez is evaluating whether the prospective should be equal partner with respect to capital investment and profit sharing (1:1) or whether the agreement should be 4:1 with Lopez retaining four-fifths interest with rights to four-fifths of the net income or loss. What factors should she consider in deciding which partnership agreement to offer? 2. Prepare the January 1, 2010, journal entry(ies) necessary to admit a new partner o success Systems through the purchase of a partnership interest for each of the following two separate cases: (a) 1:1 sharing agreement and (b) 4:1 sharing agreement. 3. Prepare the January 1, 2010, journal entry(ies) required to admit a new partner if the new partner invest cash of $ 22,537. 4. After posting the entry in part 3, what would be the new partner?s equity percentage? Please answer the question within the template. Thank you"

Required: 1: 1 Adriana Lopez should consider several factors: a: If Success Systems continues to earn profits, at a 1:1 ownership, she will have to share profits equally with her new partner. On the other hand, at a 4:1 ownership, she will only have to share one fifth of the profits with the partner. However, if the business experiences losses, Adriana will be better off if the partner is admitted at the 1:1 level-as Adriana would absorb less of the loss. b: At the 1:1 ownerhsip, her partner wil have more of a say in how the business is run, whereas at the 4:1 leve, the partner will have less of a voice in the business. c: If the partner invests in the business equal to their partnership interest, there will be more total equity in the business if the partner invests at the 1:1 level. d. It would likely be better to attract a partner if there is a lower amount of investement required by the new partner at the 4:1 level. On the other hand, a partner may wish to be more of an equal partner and might wish to invest at the 1:1 level. 2 a: Journal Entry to admit a new partner at a 1:1 ownership interest. Jan. 1 Cash 90,148 New Partner, Capital 90,148 2b: Journal entry to admit a new partner at a 4:1 ownership interest. Cash 22,537 New Partner, Capital 22,537 To admit a new partner at a 4:1 ownership interest (90,148 x 1/4)= $22,537 3. Journal entry to admit a new partner at a 4:1 ownership interest. Cash 22,537 New Partner, Capital 22,537 To admit a new partner at a 4:1 ownerhip interest. 4. What would be the new partner at a 4:1 ownership interest. Total Capital before admission of a partner Partner investment Total Capital after admission of partner New Partner's equity percentage ($22,537/$112,685) $ What Percentage