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Pritta, Pria and Pia have an architecture partnership. Each has capital of $125,000 and they share income equally. The partners will admit Pitt as an
Pritta, Pria and Pia have an architecture partnership. Each has capital of $125,000 and they share income equally. The partners will admit Pitt as an equal partner for a payment of $105,000.
Please calculate the impact of Pitt's admission using both the bonus method and the goodwill method. If the bonus method is used, how much is the bonus, and who gets it? Where does the bonus come from? If the goodwill method is used, how much is the goodwill and who gets it?
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