Question

Exercise 15-7 Phil Phoenix and Tim Tucson are partners in an electrical repair business. Their respective capital balances are 192.400 and $48,200, and they share profits and losses y Bech are confronted with personal financial problems, they decided to admit a new partner to the partnership Aer an extensive interviewing process they set to d onate the the partners Prepare the journal 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 $29,100 directly to him. Don acquires one-fifth of each of Phil's and Tim's capital interests. Phil receives $25,200 and Tim receives $15,300 Grectly from Don Don acquires a one-fifth capital interest for a $61.800 cash investment in the partnership. Total capital after the admission is to be $202,400. Don Invests $40,480 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" fort the amounts) No. Account Titles and Explanation Debit Version 11 of We s Reserved. A tes

Answer 1

Phil and Tim Journal Enteries Debit in $ Credit in S Trans. Particulars Phil Phoenix, Capital a/c 1 Dr. 23100 To Don Dallas, Capital 23100 $92,400 x 25% = $22,500 Phil Phoenix, Capital a/c Tim Tucson, Capital a/c 2 Dr. 18480 Dr. 9640 To Don Dallas, Capital 28120 $92,400 x 20% = $18,480 $48,200 x 20% 9,640 Cash a/c 3 Dr. 61800 To Don Dallas, Capital 40480 To Phil Phoenix, Capital 10660 To Tim Tucson, Capital 10660 Phil 92400 Tim 48200 Cash 61800 202400 Dallas, capital $202,400 x 20% = $40,480 Don's investment 40480 4 Interest in partnership 20% Total capital 202400 Less: Phil's capital 92400 Tim's capital 48200 Don's investment (capital) 40480 Goodwill 21320 Cash a/c Dr. 40480 To Don Dallas, Capital 40480 Goodwill a/c Dr. 21320 To Phil Phoenix, Capital To Tim Tucson, Capital 10660 10660