Question
In the GMP partnership (to which Elan seeks admittance), the capital balances of Mary, Gene, and Pat, who share income in the ratio of 6:3:1,
| In the GMP partnership (to which Elan seeks admittance), the capital balances of Mary, Gene, and Pat, who share income in the ratio of 6:3:1, are |
| Mary | $ | 254,400 | |
| Gene | 127,200 | ||
| Pat | 42,400 | ||
| Required: |
| a. | If no goodwill or bonus is recorded, how much must Elan invest for a one-third interest? (Do not round intermediate calculations.) |
| b. | Prepare journal entry for the admission of Elan if she invests $80,400 for a 20 percent interest and goodwill is recorded. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) |
| c. | Prepare journal entry for the admission of Elan if she invests $201,000 for a 20 percent interest. Total capital will be $625,000; the partners use the bonus method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) |
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