The Statement of Financial Position of the XY partnership on December 31, 2018, appears below

X and Y share profits and losses in the ratio 40:60. Each of the following questions is independent of the others. Prepare journal entries and compute each partners ending capital for each of the following: Use bonus method where appropriate and show all computations.

a. Refer to the above information. Assume that Z purchases a one-fifth of Ys capital interest directly from Y for a total of $30,000. (Direct purchase)

b. Refer to the above information. Assume that Z invests $50,000 cash into the XY partnership for a one-fifth interest in partnership capital and profits.

c. Refer to the above information. Assume that Z invests $80,000 cash into the XY partnership for a one-fourth interest in partnership capital and profits.

Cash Other Assets Total Assets Liabilities X, Capital Y, Capital $260,000 Total Liabilities and Capital $ 60,000 200,000 $ 60,000 90,000 110,000 $260,000