Question
The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger (50% of profits and losses) $ 135,000 Phil
| The Distance Plus partnership has the following capital balances at the beginning of the current year: |
| Tiger (50% of profits and losses) | $ | 135,000 |
| Phil (20%) | 105,000 | |
| Ernie (30%) | 120,000 | |
| Each of the following questions should be viewed independently. |
| a. | If Sergio invests $150,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
| b. | If Sergio invests $80,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
|
| c. | If Sergio invests $100,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
14th Edition
978-0132960649, 132960648, 132109174, 978-0132109178
