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 (40%)
The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages:
| Tiger (40%) | $ | 110,000 |
| Phil (40%) | 80,000 | |
| Ernie (20%) | 95,000 | |
Each of the following questions should be viewed independently.
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If Sergio invests $130,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used.
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If Sergio invests $120,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used.
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If Sergio invests $75,000 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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Auditing Cases An Interactive Learning Approach
Authors: Steven M Glover, Douglas F Prawitt
4th Edition
0132423502, 978-0132423502
