HomeworkLib
Question

The Distance Plus partnership has the following capital balances at the beginning of the current year:...

The Distance Plus partnership has the following capital balances at the beginning of the current year:

Tiger (40% of profits and losses) $ 120,000
Phil (30%) 90,000
Ernie (30%) 105,000

Each of the following questions should be viewed independently.

  1. 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.

  2. If Sergio invests $71,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used.

  3. If Sergio invests $80,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill method is used.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Hi

Let me know in case any issue and query:

Solution: Naming convention of account title can be slightly different as per question requiremen ournal entries Transaction Account title and explaination bitCredit Cash Tiger, Capital Phil, Capital Ernie, Capital Sergio, Capital To record the admission of new partner) Cash Tiger, Capital Phil, Capital Ernie, Capital Sergio, Capital To record the admission of new partner) Cash Goodwill Tiger, Capital Phil, Capital Ernie, Capital Sergio, Capital To record the admission of new partner, Goodwill method) 150000 (57000*40%) (57000*30%) (57000*30%) S 22,800 S 17,100 $ 17,100 $ 93,000 71,000 $ 2,480 S1,860 $ 1,860 b) (6200*40%) (6200*30%) (6200*30%) $ 77,200 $ 80,000 $ 5,000 (5000*40%) (5000*30%) (5000*3096) $ 2,000 $ 1,500 $ 1,500 $ 80,000Working note: a) Davis Capital share (120000+90000+105000+150000)*20% Less: Cash contribution Bonus will be distributed to old partners 93000 150000 57000 b) Davis Capital share (120000+90000+105000+71000)*20% Less: Cash contribution Bonus l be paid to new partner by other partner 77200 71000 6200 Total Recognized Capital (80000/20%) 400000 395000 5000 Goodwill Recognized

2 0
Add a comment
Know the answer?
Add Answer to:
The Distance Plus partnership has the following capital balances at the beginning of the current year:...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger (50% of pro...

    The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger (50% of profits and losses) $ 105,000 Phil (20%) 75,000 Ernie (30%) 90,000 Each of the following questions should be viewed independently. If Sergio invests $100,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. If Sergio invests $60,000 in cash in the business for a 20 percent interest, what...

  • The Distance Plus partnership has the following capital balances at the beginning of the current year:...

    The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger (40% of profits and losses) $ 110,000 Phil (40%) 80,000 Ernie (20%) 95,000 Each of the following questions should be viewed independently. 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. If Sergio invests $120,000 in cash in the business for a 30 percent interest, what...

  • The Distance Plus partnership has the following capital balances at the beginning of the current year:...

    The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger (50% of profits and losses) $ 70,000 Phil (40%) 40,000 Ernie (10%) 55,000 Each of the following questions should be viewed independently. If Sergio invests $60,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus method is used. If Sergio invests $50,000 in cash in the business for a 25 percent interest, what...

  • The Distance Plus partnership has the following capital balances at the beginning of the current year:...

    The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger (408 of profits and Losses) Phil (408) Ernie (201) $170,000 140.000 155,000 Each of the following questions should be viewed independently. a. If Sergio Invests $210,000 In cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. b. If Sergio Invests $175,000 in cash in the business for a 30 percent interest,...

  • The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: Tiger (50%). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $85,000 Phil (30%) . . . . . .

    The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages:Tiger (50%). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $85,000Phil (30%) . . . . . . . . . . . . . . . . . . . . . . . . ....

  • Ch 09 P-18 The Distance Plus partnership has the following capital balances at the beginning of...

    Ch 09 P-18 The Distance Plus partnership has the following capital balances at the beginning of the current year. Tiger (50% of profits and losses) Phil (40%) Ernie (10%) $ 138,000 109.990 115,000 points Each of the following questions should be viewed independently. eBook Print a. If Sergio invests $150,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus method is used. b. If Sergio invests $100.000 in cash in...

  • Each of the following questions should be viewed independently. The Distance Plus partnership has the following...

    Each of the following questions should be viewed independently. The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger (50% of profits and losses) $ 160,000 Phil (40%) 130,000 Ernie (10%) 145,000 Each of the following questions should be viewed independently. If Sergio invests $190,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus method is used. If Sergio invests $140,000 in cash...

  • please answer all parts The Distance Plus partnership has the following capital balances at the beginning...

    please answer all parts The Distance Plus partnership has the following capital balances at the beginning of the current year Tiger (50% of profits and losses) Phil (2x) Ernie (30%) $ 105,000 75,000 90,000 Each of the following questions should be viewed independently. a. If Sergio invests $100,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used. b. If Sergio invests $60,000 in cash in the business...

  • The Prince-Robbins partnership has the following capital account balances on January 1, 2018 Prin...

    The Prince-Robbins partnership has the following capital account balances on January 1, 2018 Prince, Capital Robbins, Capital $ 90,000 80,000 Prince is allocated 60 percent of all profits and losses with the remaining 40 percent assigned to Robbins after interest of 9 percent is given to each partner based on beginning capital balances. On January 2, 2018, Jeffrey invests $49,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction,...

  • The Prince-Robbins partnership has the following capital account balances on January 1, 2015:      Prince, Capital...

    The Prince-Robbins partnership has the following capital account balances on January 1, 2015:      Prince, Capital $ 145,000   Robbins, Capital 135,000          Prince is allocated 80 percent of all profits and losses with the remaining 20 percent assigned to Robbins after interest of 10 percent is given to each partner based on beginning capital balances.       On January 2, 2015, Jeffrey invests $82,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT