Question 3

The partnership of Nnaemeeka and Uzochukwu admitted Ajanlekoko as a partner on January 1, 2000. On the date of the admission the partnership had the following balances

Cash 18,000 Other assets 220,000	Total liabilities 100,000 Nnaemeka capital 90,000 Uzochukwu 48,000
238,000	Total liabilities & Equity 238,000

The sharing of profit and losses is 60% for Nnaemeka and 40% for Uzochukwu respectively

Required:

1.

Suppose Ajanlekoko pays Uzochukwu NGN60, 000 to acquire Uzochukwu interest in the partnership business. After Ajanlekoko was admitted into the partnership.

a. Record the transfer of owners’ equity on the partnership books

b. Prepare the partnership balance sheet immediately after Ajanlekoko is admitted into the partnership.

2.

Assuming Ajanlekoko was admitted into the partnership by investing NGN62, 000 cash to acquire one- fourth interest in the partnership business

a. Compute Ajanlekoko capital balance and determine if there is any bonus, if any who will get the bonus.

b. Record Ajanlekoko investment in the business

c. prepare the partnership balance sheet immediately Ajanlekoko becomes a partner in the partnership business.