S. Pagan and T. Tabor share income on a 6:4 basis. They have
capital balances of $100,000 and $50,000, respectively, when W.
Wolford is admitted to the partnership.
Prepare the journal entry to record the admission of W. Wolford
under each of the following assumptions.
Homework Answers
Total capital = $100,000 + $50,000 + $45,000 = $195,000
W. Wolford share capital = $195,000 X 30% = $58,500
Actual cash brought by W. Wolford is $45,000
Bonus to W. Wolfor = $58,500 - $45,000 = $13,500
Bonus contribution to W. Wolford by S. Pagan = $13,500 X 6/10 = $8,100
Bonus contribution to W. Wolford by T. Tabor = $13,500 X 4/10 = $5,400
Journal entry to record W. Wolford admission:
| Account Titles and Explanation | Debit | Credit |
| Cash | $45,000 | - |
| S. Pagan capital | $8,100 | - |
| T. Tabor capital | $5,400 | - |
| W. Wolford capital | - | $58,500 |
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