In case A the bonus method is used, Eklund capital balance after admission of Gustafson is? A) 88.25KB) 98KC) 101.75KD) 110kCase A: if the goodwill method is used to record the admission of Gustafson, goodwill will be recorded on the books of the partnership in the amount of? A) 125KB) 33.75KC) 200KD) 75K

Bonus Method Case A Total capital of DEF 425000 180000+95000+150000) Investment of Gustafson 125000 Interest of Gustafson 20% Total capital of new partnership 550000 425000+125000) Value of Gustafson's Capital 110000 550000*20/100) Calculation of Bonus Gustafson's investment - Gustafson's capital value 15000 (125000-110000) In this case as bonus is positive it should be devided among the old partners in their profit sharing ratio. Danielson = 15000*25/100 3750 Eklund = 15000*45/100 6750 Forsberg 15000*30/100 4500 Journal Description Debit Credit Cash A/c Dr 125000 To Gustafson's Capital 110000 To Danielson's Capital 3750 To Eklund's Capital 6750 To Forsberg's Capital 4500 Statement of partners new capital Danielson - 180000+3750 >> 183750 Eklund - 95000+6750 >> 101750 Forsberg - 150000+4500 >> 154500 Gustafson - 110000 Bonus Method Case B Total capital of DEF 425000 (180000+95000+150000) Investment of Gustafson 90000 Interest of Gustafson 20% Total capital of new partnership 515000 (425000+90000) Value of Gustafson's Capital 103000 (515000*20/100) Calculation of Bonus Gustafson's investment - Gustafson's capital value -13000 90000-103000) In this case as bonus is negative it should be adjusted to Gustafson's investment. So Gustafson's new capital would be = 90000-13000 = 77000 Journal Description Debit Credit Cash A/c Dr 90000 To Gustafson's Capital 77000 To Gustafson's Bonus 13000 Statement of partners new capital Danielson - 180000 Eklund - 95000 Forsberg - 150000 Gustafson - 77000 Goodwill method Case A Total capital of DEF 425000 (180000+95000+150000) Investment of Gustafson 125000 Interest of Gustafson 20% Total capital of new partnership 550000 (425000+125000) Value of Gustafson's Capital 110000 550000*20/100) Calculation of Goodwill