Admission of a Partner
Debra and Merina sell electronic equipment and supplies through their partnership. They wish to expand their computer lines and decide to admit Wayne to the partnership. Debra's capital is $200,000, Merina's capital is $160,000, and they share income in a ratio of 3:2, respectively.
Record Wayne's admission for each of the following independent situations:
a. Wayne directly purchases half ofMerina's investment in the partnership for $90,000.
b. Wayne invests the amount needed to give him a one-third interest in the capital of the partnership if no goodwill or bonus is recorded.
c. Wayne invests $110,000 for a one-fourth interest. Goodwill is to be recorded.
d. Debra and Merina agree that some of the inventory is obsolete. The inventory account is decreased before Wayne is admitted. Wayne invests $100,000 for a one-fourth interest.
e. Wayne directly purchases a one-fourth interest by paying Debra $80,000 and Merina $60,000. The land account is increased before Wayne is admitted.
f. Wayne invests $80,000 for a one-fifth interest in the total capital of$440,000.
g. Wayne invests $100,000 for a one-fifth interest. Goodwill is to be recorded.
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