Accounting problems

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fnn22

Business Finance

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attached file s one question I crop it to parts. I will send you 2 more questions.

pleasemake sure you will provise me 100 persent correct

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The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger (40% of profits and losses) Phil (20%) Ernie (40%) $ 65,000 35,000 50,000 Each of the following questions should be viewed independently. a. If Sergio invests $70,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 Record the admission of new partner under bonus method. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal b. If Sergio invests $60,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the bonus method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 > Record the admission of new partner under bonus method. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal c. If Sergio invests $72,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the goodwill method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 2 Record the entry for goodwill allocation, during the admission of a new partner. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal c. If Sergio invests $72,000 in cash in the business for a 30 percent interest, what journal entry is recorded? Assume that the goodwill method is used. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 2 > Record the investment made by the new partner in the business. Note: Enter debits before credits. Transaction General Journal Debit Credit 2 Record entry Clear entry View general journal
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Explanation & Answer

Attached.

1

Accounting Problems

Student name
Institutional affiliation:

2
Accounting Problems
The attached word document addresses the question “Accounting Problems” by answering the
following:


Question 1



Question 2



Question 3


1

Running Head: Accounting Problems

Accounting Problems

Student name
Institutional affiliation:

2

Accounting Problems
Accounting Problems
Question 1
a. The investment by Sergio = $70,000 at interest of 30%
According to the bonus method:

Existing

Capital

Capital

Profit/loss sharing

partner

balances

Ratio

ratio

Tiger

$65,000

43.33

40

Phil

$35,000

23.33

20

Ernie

$50,000

33.33

40

Total

$150,000

100.00

100

Original partners’ capital = $150,000
New partner investment= $70,000
Total capital= $150,000+ $70,000= $220,000
The new partner has investment interest of 30%
Bonus= New partner interest x total capital
= 30/100 x 220,000
= $66,000
Base on the profit sharing ratio, the contribution capital toward the new partner:

3

Accounting Problems
Tigers= $66,000 x 40/100= $26,400
Phil = $66,000 x 20/100= $13,200
Ernie = $66,000 x 40/100= $26,400
Transaction

General journal

Debit

1

Tiger’s Capital

$26,400

Phil’s Capi...


Anonymous
Just what I was looking for! Super helpful.

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