Question

The Struter Partnership has total partners' equity of $580,000, which is made up of Main, Capital, $406,000, and Frist, Capital, $174,000. The partners share net income and loss in a ratio of 77% to Main and 23% to Frist. On November 1, Adison is admitted to the partnership and given a 20% interest in equity and a 20% share in any income and loss.

Prepare journal entries to record the admission of Adison for a 20% interest in the equity and a 20% share in any income and loss under independent assumption.

1. (1) Record the admission of Adison with an investment of $145,000 for a 20% interest in the equity and a 20% share in any income and loss.

2. (2) Record the admission of Adison with an investment of $180,000 for a 20% interest in the equity and a 20% share in any income and loss.

3. (3) Record the admission of Adison with an investment of $115,000 for a 20% interest in the equity and a 20% share in any income and loss.

No	Transaction	General Journal	Debit	Credit
A	(1)	Cash	145,000
		Adison, Capital		145,000
B	(2)	Cash	180,000
		Adison, Capital		152,000
		Main, Capital
		Frist, Capital
C	(3)	Cash	115,000
		Main, Capital
		Frist, Capital

Answer 1

Craeli't Txn (1.) General Journal Cash G Alc i TO Adison Capital Debit De $145,000 ALC $145.000 L (2) $180,000 Cash Alc To Alism, Capital To main, Capital To prist, capital o r AICI Alc AIC $159,0To $21,560 $ 6,440 1 (3) Cash Al De 1 $115,000 I main, Capital All Dr $ 18,480 Ifrist, Capital All Dr $5,520 _ To Adison, Capital Alc $139,000 Working (V14580,000 + $145000) x 80%. = $ 145,000 _ 302||$580,000 + $180,000 - $760,000 $760,000 8 20% = 1152.000 $180,000 - $152,000 $28.000 $28000 x 77% a $21.560 $28000 x 2234. - $6.440

. (3) 580,000 + के 115000 - 1695,000 $695,oro x264 - 2139, 010 4|15000 - 2189,0TO A ( २५,000) (३२५४00) 2771 (18.480) । (३२५,०००) x28) (45,526)
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