Question

Problem 3

The capital accounts of the Low, Medium and High partnership at December 31, 2019, together with profit and loss sharing ratios are as follows:

Low (40%) 204,000

Medium (20%) 118,000

High (40%) 278,000

The partners agree to admit Very High into the partnership.

REQUIRED: Prepare the journal entry or entries to admit Very High into the partnership under each of the following independent assumptions.

1. Low sells half of his interest and medium sells 40% of her interest to Very High for a total purchase price of $190,000 paid directly to Low and Medium.

2. Very High invests $180,000 cash in the partnership for a 20% interest in capital and profits and the partnership assets are not revalued.

3. Very High invests $120,000 cash in the partnership for a 20% interest in capital and profits and the partnership assets are revalued.

4. Very High invests $200,000 cash in the partnership for a 30% interest in the capital and profits and partnership assets are revalued.

Answer 1

M1 w M 1 w 3 4 5 6 S 5 9 10 M 78 Y 11 12 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 ANSWER : a 어 Note ib ! 404 , T! 2 12 2 Capital Account of eachi Low $ 204000 Medium $ 118,000 High 278,000 Their old poft Sharing Ratio Law : Medium High: 4011 20ite L2 if they adnit very high as new , Partner with I to share in Rofit than new profit Sharing Ratio Current Ratio low Medium High I 5.3 3 a carifies by how 2 2 1 1 2 3 4 5 sacrifies by Medium Lho 100 25 til Low : Medium High! very high 2b z I 5 3 i 10 ! 2720 25 를 4 tyho - 5 6 New Ratio 2 2 of 5 1 2 3 1 2 그 25 SHOT ON REDMI 7 AT DUAL CAMERA

WK 182124 THURSDAY WK 18122 BO APRIL FRIDAY WTF 1921 26 $ , 8 9 Bank ALC Dr 190000 To Very High capital Mc $ 190000 (very tigh innest 190 poo) very high capitaltie Dor. $190,000 how capital are (Total purchase price share to To Medium Capital Alc_$5428572 Low and Medium in scarifi $135714.28 TO 10 10 11 11 cing Ratio 5:2 12 12 1 Low Capital Ale n $135714,28 Medium capital de r$ 54 285.12 To Banks 190,000 2 2 Note 3 (2) Bank Acc r $180000 To very High capitalai $ 180000 (very High Invest in company ) Note: as 20-1.273 Interest of neuf paid by 3 5 T5 New Ratio: 4 5 5 6 all partner equally Low Medium High very high 7 35 tis s is 35 to 7 or 1/5 2020 5 5 3 15 SHOT ON REDMI 7 AT DUAL CAMERA

MAY KIB 127-244 FRIDAYTA 01 MT w F S M T W T 5 S 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 N 5 21 5. 3 New c 3 10 SI 12 apital 204 00 0 + 118000 + 278000+ 180000 180000 very 'Capital Aleh $780.000 To how $ 2,60,000 To Medium & louooo To High $ 2 60000 To very high $ 156000 $ 120000 3) Bank Are Tovery fligh capital All $ 120,000 (very high indest in company) Note as New Total capital 2040001 118000+278000 + 120,000 = 720,000 Capital Ale In $720006 To Low 2 40000 To Medium 96000 To High 240000 To very high Ccapital divide in Ratio 5:2 5:3) 2 5 144ooo 6 YAGNUZ EO SHOT ON REDMI 7 AT DUAL CAMERA 2020

WK 18. 123-24 SATURDAY WK 19.125-24 MONDAY 02 MAY TWTFS MTWTF to 17 19 20 21 22 23 24 LIPART 8 9 9 10 10 ANSWER OF Note >ay Very High havent-3200000 New Ceupital: 204000+ 118000 + 278000 + 2000002 $ 800,000 Share averenigh 10 paid by all partner equally t b/ 30 11 11 12 12 to 1 New Ratto a low, Medium, tight very high 2 - to its to 2. 3 I du 3 to 3 3 4 3 to 4 5 5 6 ſo ENTRY: - Banks All Dr $ 200000 To very high Capital Aic 200000 Capital Ale Dr. 800000 940,000 To Medium 86000 To high Lyopoo New Capital divide in Ratiosi 18313) To very high 240.000 03 SUNDAY To how 2020 SHOT ON REDMI 7 AI DUAL CAMERA