The capital accounts of the Ann, Bob, and Car partnership at December 31, 2011, together with profitand loss-sharing ratios, are as follows:
Ann (25%) | $75,000 |
Bob (25%) | 100,000 |
Car (50%) | 125,000 |
The partners agree to admit Dar into the partnership.
REQUIRED: Prepare the journal entry or entries to admit Dar into the partnership and calculate the partners’ capital balances immediately after his admission under each of the following independent assumptions:
1. Car sells half of her interest to Dar for $90,000, and the partners agree to admit Dar into the partnership.
2. Dar invests $75,000 cash in the partnership for a 25 percent interest in the partnership capital and profits, and partnership assets are revalued.
3. Dar invests $80,000 cash in the partnership for a 20 percent interest in the capital and profits, and partnership assets are revalued.
4. Dar invests $90,000 cash in the partnership for a 30% interest in the capital and profits, and partnership assets are not revalued.
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