Concept explainers
acalculation of amount to be invested by new partner
Admission of partner:changes in the membership of
Requirement 1
the amount to be invested by E for one-third interest, when no
bJournal entry for admission of new partner
Admission of partner:changes in the membership of partnership occurs with the addition of new partners or disassociation of present partners. New partners are often a brings additional capital or needed expertise. A new partner can only be admitted with unanimous approval of all the existing partners, further public announcements are made about admission of partner. Section 306 of Uniform partnership act UPA 1997 states that a new partners are not liable for any liability incurred before new partners admitted. Thus, a new partner can be charged for partnership liabilities of existing partnership to the extent of capital contribution at the time of admission.
Requirement 2
the
cJournal entry for admission with given investment.
Admission of partner:changes in the membership of partnership occurs with the addition of new partners or disassociation of present partners. New partners are often a brings additional capital or needed expertise. A new partner can only be admitted with unanimous approval of all the existing partners, further public announcements are made about admission of partner. Section 306 of Uniform partnership act UPA 1997 states that a new partners are not liable for any liability incurred before new partners admitted. Thus, a new partner can be charged for partnership liabilities of existing partnership to the extent of capital contribution at the time of admission.
Requirement 3
the journal entry for admission of E if she invests $200,000 for 20 percent, and partner uses bonus method.
dliability of new partner’s for partnerships obligations prior to admission
Admission of partner:changes in the membership of partnership occurs with the addition of new partners or disassociation of present partners. New partners are often a brings additional capital or needed expertise. A new partner can only be admitted with unanimous approval of all the existing partners, further public announcements are made about admission of partner. Section 306 of Uniform partnership act UPA 1997 states that a new partners are not liable for any liability incurred before new partners admitted. Thus, a new partner can be charged for partnership liabilities of existing partnership to the extent of capital contribution at the time of admission.
Requirement 4
the new partner’s obligation on liabilities existed prior to admission of new partner
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Advanced Financial Accounting
- In the GMP partnership (to which Elan seeks admittance), the capital balances of Mary, Gene, and Pat, who share income in the ratio of 6:3:1, are Mary $ 268,800 Gene 134,400 Pat 44,800 Required: If no goodwill or bonus is recorded, how much must Elan invest for a one-third interest? Prepare journal entry for the admission of Elan if she invests $81,100 for a 20 percent interest and goodwill is recorded. Prepare journal entry for the admission of Elan if she invests $202,000 for a 20 percent interest. Total capital will be $650,000; the partners use the bonus method.arrow_forwardAfter the tangible assets have been adjusted to current market prices, the capital accounts of Grayson Jackson and Harry Barge have balances of $64,900 and $86,500, respectively. Lewan Gorman is to be admitted to the partnership, contributing $43,300 cash to the partnership, for which he is to receive an ownership equity of $50,500. All partners share equally in income. a. Journalize the entry to record the admission of Gorman, who is to receive a bonus of $7,200. If an amount box does not require an entry, leave it blank. Cash Grayson Jackson, Capital Harry Barge, Capital Lewan Gorman, Capital b. What are the capital balances of each partner after the admission of the new partner? Partner Balance Grayson Jackson $ Harry Barge $ Lewan Gorman $arrow_forwardYuanne Sipp and Letitia Grimes share partnership income on a 3:2 basis. They have capital balances of $550,000 and $284,000, respectively, when Tammy Tuck is admitted to the partnership. Prepare the journal entry to record the admission of Tammy Tuck assuming Tuck invests $240,000 for a 25% ownership interest. (Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit select an account title enter a debit amount enter a credit amount select an account title enter a debit amount enter a credit amount select an account title enter a debit amount enter a credit amount select an account title…arrow_forward
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- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College