Questions 1, 2 & 3

The following information relates to items / end 2. The books of Annie, Billy, and Clive partnership at December 31, 2002 reported the book values of assets totaling $2 050 000 and the capital accounts of Annie, Billy, and Clive were $850 000. S800 000 and $ 400 000 respectively. The partners currently share profits and losses in the ratio of 2:3:5. The partners agreed that Dave would be admitted after paying $480 000 cash for a one- fifth interest. The fair market value of the tangible assets increased by $300 000. 1. The balance in the goodwill after the admission of Dave would be Futuro now, ow C. $300 000 D. $480 000 2 The balance in the capital account of Annie after the admission of Dave would be . $850 000 B. $910 000 C. $920 000 D. $946 000 3. If goodwill is written off the books, which of the following is? A. Debit Goodwill credit Partners' Capital account in the old profit sharing ratio. B. Debit Goodwill, credit Partners' Capital account in the new profit sharing ratio. C. Credit Goodwill, debit Partners' Capital account in the new profit sharing ratio. D. Credit Goodwill, debit Partners' Capital account in the old profit sharing ratio