Question

Exercise 15-7 Phil Phoenix and Tim Tucson are partners in an electrical repair business. Their respective capital balances are $92,900 and $48,300, and they share profits and losses equally. Because the partners are confronted with personal financial problems, they decided to admit a new partner to the partnership. After an extensive Interviewing process they elect to admit Don Dallas Into the partnership Prepare the joumal entry to record the admission of Don Dallas Into the partnership under each of the following conditions: 1. 2. 3. 4. Don acquires one-fourth of Phil's capital interest by paying $28,800 directly to him. Don acquires one-fifth of each of Phil's and Tim's capital interests. Phil receives $24,500 and Tim receives $14,400 directly from Don. Don acquires a one-fifth capital Interest for a $61,300 cash Investment in the partnership. Total capital after the admission is to be $202,500. Don Invests $40,500 for a one-fifth Interest in partnership capital. Implicit goodwill is to be recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) No. Account Titles and Explanation Debit Credit 1. Phoenix, Capital 28800 Dallas, Capital 28800 2. Phoenix, Capital 24500 Tucson, Capital 14400 Dallas, Capital 38900 goodwill 61300 Phoenix, Capital (To record implicit goodwill) (To record investment by Don)

Answer 1

Particulars N . Debit $ Credit $ Phil Phoenix, Capita Don Dallas, Capital A W 2. Phil Phoenix, Capital Tim Tucson, Capital Don Dallas, Capital 23,225 bandar ANAMARIAH LA M A 23,225 AAN ANTARABANGSAATLER manera intentenmentant mannen NAV MAKITA MAHA 18,580 9,660 28,240 Cash 61,300 Don Dallas, Capital Phil Phoenix, Capital (20,800/2) Tim Tucson, Capital (20,800/2) 40,500 10,400 10,400 20,800 Goodwill h ave Phil Phoenix, Capital (20,800/2) Tim Tucson, Capital (20,80072| (To record implicit goodwi 10,400 10,400 40,500 40,500 Cash WAHANA NA MALE Don Dallas, Capital (To record investment by Don)

Notes to Accounts 1. (Phil's Capital) = $92,900 x 1/4= $23,225 2. (Phil's Capital) = $92,900 x 1/5 = $18,580 (Tim's Capital)= $48,300 x 1/5= $9,660 = $18,580 + $9,660 = $28,240 3. Total Capital = Phil Capital + Tim Capital + Cash = $92,900 + $48,300 + $61,300 = $202,500 Don, capital = $202,500 x 1/5 = $40,500 4. Don's investment - Interest in partnership = Total capital Less: Phil's capital 92,900 + Tim's capital 48,300 + Don's investment 40,500 Goodwill $40,500 - 1/5 = $202,500 ($181,700) $20800 b20 [Co... Axis Bank 2019-20 Tally.ERP 9 WË Document