On June 30, 2006, the condensed balance sheet for the partnership of Eddy, Fox, and Grimm, together
Question:
On June 30, 2006, the condensed balance sheet for the partnership of Eddy, Fox, and Grimm, together with their respective profit and loss sharing percentages were as follows:
| Assets, net of liabilities | $320,000 |
| Eddy, capital (50%) | $160,000 |
| Fox, capital (30%) | 96,000 |
| Grimm, capital (20%) | 64,000 |
|
| $320,000 |
Eddy decided to retire from the partnership and by mutual agreement is to be paid $180,000 out of partnership funds for his interest. Total goodwill implicit in the agreement is to be recorded. After Eddys retirement, what are the capital balances of the other partners?
|
| Fox | Grimm |
| a. | $ 84,000 | $56,000 |
| b. | $102,000 | $68,000 |
| c. | $108,000 | $72,000 |
| d. | $120,000 | $80,000 |
Assume instead that Eddy remains in the partnership and that Hamm is admitted as a new partner with a 25% interest in the capital of the new partnership for a cash payment of $140,000. Total goodwill implicit in the transaction is to be recorded. Immediately after admission of Hamm,What shoud be Eddys capital account balance ?
Expert Answer:
To determine the capital balances of the other partners after Eddys retirement we need to calculate ... View the full answer
Advanced Accounting
ISBN: 978-0134472140
13th edition
Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith
