Question
The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: Tiger (50%)
The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages:
| Tiger (50%) | $ | 75,000 |
| Phil (20%) | 45,000 | |
| Ernie (30%) | 60,000 | |
Each of the following questions should be viewed independently.
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If Sergio invests $60,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used.
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Record the admission of new partner under bonus method.
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If Sergio invests $40,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used.
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Record the admission of new partner under bonus method.
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If Sergio invests $50,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used.
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Record the entry for goodwill allocation, during the admission of a new partner.
- Record the investment made by the new partner in the business.
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Fundamental financial accounting concepts
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
8th edition
978-007802536, 9780077648831, 0078025362, 77648838, 978-0078025365
