Question

Following is the current balance sheet for a local partnership of doctors: $ Cash and current assets Land Building and equipment (net) 59,eee 159,000 162,889 Liabilities A, capital B, capital C, capital D, capital Totals $ 54,800 34,000 54,000 184, eee 134, eee $ 380, eee Totals $ 380, eee The following questions represent independent situations: a. E is going to invest enough money in this partnership to receive a 20 percent interest. No goodwill or bonus is to be recorded. How much should E invest? b. E contributes $90,000 in cash to the business to receive a 20 percent interest in the partnership. Goodwill is to be recorded. Profits and losses have previously been split according to the following percentages: A, 30 percent: B. 10 percent; C, 40 percent and D. 20 percent. After E makes this investment, what are the individual capital balances? C. E contributes $52,000 in cash to the business to receive a 20 percent interest in the partnership. Goodwill is to be recorded. The four original partners share all profits and losses equally. After E makes this investment, what are the individual capital balances d. E contributes $52,000 in cash to the business to receive a 18 percent interest in the partnership No goodwill or other asset revaluation is to be recorded. Profits and losses have previously been split according to the following percentages: A 10 percent B 30 percent; C, 20 percent, and D. 40 percent. After E makes this investment, what are the individual capital balances? e. C retires from the partnership and, as per the original partnership agreement, is to receive cash equal to 115 percent of her final capital balance. No goodwill or other asset revaluation is to be recognized. All partners share profits and losses equally. After the withdrawal, what are the individual capital balances of the remaining partners?

Answer 1

-Answes E hvefment E invesfmut aoy(onginal capita+ E ivefment Envekmurt 20 X34000+ 5y00 +104000 +134000 .oveshment E fovesfment a0y) 20A X 3600O Enverfment 65 200 = 81500 80Y E nvement 00 ndividua Capibl alances Emplied valuepnehip 90000 450,000 Tot al Capital ae fnvesmenk E 326000 +90,000 416000

Good coill 416000 450000 34000 Goodesi 34000 alecation getuil B-allocationgcodwill 30 x 34000-$10800 3400 allocation fgoodsill407. x34000 all ocolion god С. - $13600 6800 X 34000 - 207 Capital halances A D origiral balana 3yo00 Goodus 5y000040001340000 3400 13600 6800 o I0200 Tovesfment 40490,000 Capibal kalantes44200 540014600 $140800 90,000 40 ndivi daal Capitalbalances uwai tyibote do the paarey Eh apponenbly bngna оheт

NO ipodwi ecause E'nvefment 5a000 less than 20% uting apital 318000 E ovefment original capthalEinvehment 20% 7 $52000Grodusil 20326000 5000 +godts goodasil 5000 aoy. x318000 t 07.xgadasill 80 7. Goodwill 75600 52000 Gooduwi 23600 O.8 Goodwi 9500 .E capital balance 5 a000 a9500 81500 total capiha! Es Capftal $81500 b a0 neus (26000 t1500 4407500)

Fogeno A - Capit al balance 44200 Capib a balance Capitcal balance D-Capibal balance140800 57400 114600 Captbal balance 4 81500 Tndividual Capital balances WAM w M After nvefment, Tobal capit al 396000 t$52000 3 8000 balance 318000 18 /, 68040 Eo poymert 52000 Bonus 53000 68040 16040

Poge NO(5 from Boпиs t0 16040 1604 481a 30y x$16040 C 3008 20y. x 16040 6416 40y. x 16040 Capthal talancs A C E Oiginal balanges 3400054000(0 y00134000a Trverfment 52000 ( 604)4 812) 3209) 6416)16040 $323969188o0792 l24584| 68040| Bonus Capit al balanees odividual al balances ch Capital balance to4000 cs coflechion ॥१6०0

Page NO Bonu leing paid to C 119600-104000 15600 17 Bonus trom A విం - x 15600 5200 15600 5200 C = 15600 Capital balances A D E Original balances 43400054000ovo00 1300 5200)5200)15600520 Bonus Payment Capital balances ( 119 600 o 288008800 p128800