The capital accounts of the Ann, Bob, and Carrie partnership at December 31, 2011, together with profit and loss sharing ratios, are as follows:
Ann (25%) ... $ 75,000
Bob (25%) .... 100,000
Carrie (50%) ... 125,000
The partners agree to admit Darling into the partnership.
REQUIRED: Prepare the journal entry or entries to admit Darling into the partnership and calculate the partners’ capital balances immediately after his admission under each of the following independent assumptions:
1. Carrie sells half of her interest to Darling for $90,000, and the partners agree to admit Darling into the partnership.
2. Darling invests $75,000 cash in the partnership for a 25% interest in the partnership capital and profits, and partnership assets are revalued.
3. Darling invests $80,000 cash in the partnership for a 20% interest in the capital and profits, and partnership assets are revalued.
4. Darling invests $90,000 cash in the partnership for a 30% interest in the capital and profits, and partnership assets are not revalued.