Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Tom and Mary are running a beauty parlor business since year 2010. Their capital balances on 31 st December, 2015 were 380,000 and 360,000. On
Tom and Mary are running a beauty parlor business since year 2010. Their capital balances on 31st December, 2015 were 380,000 and 360,000. On this date, they have decided to add Peter as a new partner in the business. Peter is a young man and has earned a great reputation in the field of fashion and parlor work due to her foreign qualification and experience.
- Peter invests equipment 90,000 and sufficient cash for one third interest in the business.
- Peter invests cash 400,000 and is to receive a one half interest in the partnership. Tom and Mary decided to maintain their level of capital in the partnership business.
- Peter invests cash 300,000 and is to receive a one fourth interest in the business. After her admission, total capital of the partnership business is to be 1,200,000.
- Peter purchased a one third interest of Mary for 110,000 and a one fourth interest of Tom for 100,000 cash.
Required
Journal entries in respect of Peter admission in the business under the above cases
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started