Question
he ABCD Partnership has the following balance sheet at January 1, 20X0, prior to the admission of new partner, E. Cash and current assets $39,000
he ABCD Partnership has the following balance sheet at January 1, 20X0, prior to the admission of new partner, E. Cash and current assets $39,000 Liabilities $52,000 Land 234,000 As capital 26,000 Building and equipment 130,000 Bs capital 52,000 Cs capital 117,000 Ds capital 156,000 Total assets $403,000 Total liabilities and capital $403,000 E contributed $124,000 in cash to the business to receive a 20% interest in the partnership. Goodwill was to be recorded. The four original partners shared all profits and losses equally. Required: (A) Prepare the journal entries necessary to record goodwill. (B) After goodwill has been recorded, what were the individual capital balances of the original partners? (C) Prepare the journal entry necessary to record E's contribution.
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