The capital accounts of the Fax and Bel partnership on September 30, 2011, were:
Fax capital (75% profit) | $140,000 |
Bel capital (25% profit) | 60,000 |
Total capital | $200,000 |
On October 1, Rob was admitted to a 40 percent interest in the partnership when he purchased 40 percent of each existing partner’s capital for $120,000, paid directly to Fax and Bel.
REQUIRED
1. Determine the capital balances of Fax, Bel, and Rob after Rob’s admission to the partnership if goodwill
is not recorded.
2. Determine the capital balances of Fax, Bel, and Rob after Rob’s admission to the partnership if goodwill
is recorded, assuming that the book value and fair value of recorded assets are equal.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.