Problem

The AT Partnership was organized several years ago, and on January 1, 2011, the partners a...

The AT Partnership was organized several years ago, and on January 1, 2011, the partners agree to admit Car for a 40 percent interest in capital and earnings. Capital account balances and profit- and losssharing ratios at January 1, 2011, before the admission of Car, are as follows:

Aid (50%)

$500,000

Tha (50%)

280,000

REQUIRED: Prepare journal entries to record the admission of Car for a 40 percent interest in the capital and rights to future profits under the following independent assumptions.

1. Car pays $450,000 directly to Aid and Tha for 40 percent of each of their interests, and the bonus procedure is used.


2. Car pays $600,000 directly to Aid and Tha for 40 percent of each of their interests, and goodwill is recorded.


3. Car invests $450,000 in the partnership for her 40 percent interest, and goodwill is recorded.


4. Car invests $600,000 in the partnership for her 40 percent interest, and goodwill is recorded.

Step-by-Step Solution

Request Professional Solution

Request Solution!

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.

Request! (Login Required)


All students who have requested the solution will be notified once they are available.
Add your Solution
Textbook Solutions and Answers Search
Solutions For Problems in Chapter 16