Question 4 F:12

Higgins is admitted to the partnership of Reano \& Nedwick. Prior to her admission, the partnership books show Reano's capital balance at $200,000 and Nedwick's at $100,000. Assume Reano and Nedwick share profits and losses equally. Read the requirements. Requirement 1. Compute each partner's equity on the books of the new partnership under the following plans: a. Higgins pays $115,000 for Nedwick's equity. Higgins pays Nedwick directly. Begin by computing the partner's equity base for plan a. Higgins pays $115,000 for Nedwick's equity. Higgins pays Nedwick directly. (Enter a share for each partner. Complete all answer boxes. For accounts with a $0 balance, make sure to enter " 0 " in the appropriate cell. Enter negative amounts with a parentheses or minus sign.) Requirements 1. Compute each partner's equity on the books of the new partnership under the following plans: a. Higgins pays $115,000 for Nedwick's equity. Higgins pays Nedwick directly. b. Higgins contributes $100,000 to acquire a 1/4 interest in the partnership. c. Higgins contributes $140,000 to acquire a 1/4 interest in the partnership. 2. Journalize the entries for admitting the new partner under plans a, b, and c