Problem 4 Alex, Bames, Caleb and Davis have the following partnership business: Assets Cash Current assets Land Building and Equip't $55,000 30,000 205,000 110,000 Liabilities and equities Liabilities Alex, capital Bames, capital Caleb, capital Davis, capital Total Liab. and Eq's $40,000 60,000 70,000 90,000 140,000 $400,000 Total assets $400,000 The partners share profits and losses equally. Provide the partners' ending capital balances in each of the following independent situations $80,000 Eldridge is added to the partnership after contributing to the business. No goodwill or bonus is recorded. Eldridge contributes $100,000 in cash to the business and receives a 20% interest in the partnership. Eldridge's $100,000 investment is considered 20% of the new business's value, so goodwill may need to be recorded. (Eldridge's capital balance will be exactly $100,000.) Eidridge is added to the partnership and receives 20% of each partner's interest in the business after paying $40,000 directly to each of the four partners. No goodwill is recorded. d. Caleb retires and has been paid 130% of her capital balance according to the terms of the original partnership agreement. The bonus method is used