Question

Required information Problem 12-5A Partner withdrawal and admission LO P3, P4 [The following information applies to the questions displayed below.] Meir, Benson, and Lau are partners and share income and loss in a 1:4:5 ratio (in percents: Meir, 10%; Benson, 40%; and Lau, 50%). The partnership's capital balances are as follows: Meir, $33,000; Benson, $139,000; and Lau, $178,000. Benson decides to withdraw from the partnership. Problem 12-5A Part 2 2. Assume that Benson does not retire from the partnership described in Part 1. Instead, Rhode is admitted to the partnership on February 1 with a 25% equity. Prepare journal entries to record Rhode's entry into the partnership under each separate assumption: Rhode invests (a) $116,667; (b) $85,167; and (c) $152,834. (Do not round your intermediate calculations.)

Please answer in this format please

Answer 1

Solution:

Transaction	General Journal	Debit	Credit
(a)	Cash	$ 116,667
	Rhode Capital		$      116,667
	(Being new partner admission)
(b)	Cash	$    85,167
	Meir Capital (1/10)	$      2,362
	Benson Capital(4/10)	$      9,450
	Lau Capital (5/10)	$    11,812
	Rhode Capital		$      108,792
	(Being new partner admission)
(c)	Cash	$ 152,834
	Meir Capital (1/10)		$           2,713
	Benson Capital(4/10)		$        10,850
	Lau Capital (5/10)		$        13,563
	Rhode Capital		$      125,709
	(Being new partner admission)

Notes:

1)

Particular	Amount$
Capital Before admission	$   350,000.00
Add: Rhode capital (a)	$   116,667.00
Total Capital (b)	$   466,667.00
Rhode Share of Capital 25% (c =b*25%)	$   116,666.75
Bonus (a-c)	$                     -

2)

Particular	Amount$
Capital Before admission	$ 350,000.00
Add: Rhode capital(a)	$    85,167.00
Total Capital (b)	$ 435,167.00
Rhode Share of Capital 25% (c =b*25%)	$ 108,791.75
Bonus to Rhode by existing partners (1:4:5) (d=c-a)	$    23,624.75
Meir (1/10)*d	$      2,362.48
Benson(4/10)*d	$      9,449.90
Lau(5/10)*d	$    11,812.38
Total	$    23,624.75

3)

Particular	Amount$
Capital Before admission	$ 350,000.00
Add: Rhode capital(a)	$ 152,834.00
Total Capital (b)	$ 502,834.00
Rhode Share of Capital 25% (c =b*25%)	$ 125,708.50
Bonus to existing partner by Rhode (1:4:5) (d=a-c)	$    27,125.50
Meir (1/10)*d	$      2,712.55
Benson(4/10)*d	$    10,850.20
Lau(5/10)*d	$    13,562.75
Total	$    27,125.50

4) Final Calculation are rounded to nearest whole dollar.