Part A (2019) Partnership A, B, and C is a law firm. You have been engaged as accountant to prepare financial statements for the year ended December 31, 2019. 'Salary expenses' listed on the trial balance are each partners' withdrawals for the year. Partnership profits are allocated based first on salaries, then on interest on opening capital balances, then on a fixed ratio.

Salary allocation amounts are: A $100,000

B $100,000

C $160,000

Opening capital balances are: A $70,000

B $60,000

C $70,000

Interest rate is: 5%

The fixed ratio is: A 2

B 3

C 5

Part B (2020)

On December 31, 2020 new partner D invests other assets into the partnership for a one-quarter ownership interest. An equal amount of capital is contributed by A, B, and C to make up the difference. At December 31, 2020, the partners' capital balances are as follows:

A

$200,000

B

180,000

C

190,000

$570,000

Fair value of other assets from D

$50,000

Immediately after this, partner C withdraws from the partnership. She is paid in cash the balance in her capital account plus a bonus, contributed equally from the capital balances of A, B, and D.

Bonus paid to C

$18,000

Required

Prepare necessary adjusting entries at December 31, 2020 to record the admission of partner D and the withdrawal of partner C. Show all calculations.