The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger

Question:

The Distance Plus has the following capital balances at the beginning of the current year:
Tiger (50% of profits and losses) . . . . . . . . . . . . . . $85,000
Phil (30%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
Ernie (20%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,000
Each of the following questions should be viewed independently.
a. If Sergio invests $100,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus method is used.
b. If Sergio invests $60,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the bonus method is used.
c. If Sergio invests $72,000 in cash in the business for a 25 percent interest, what journal entry is recorded? Assume that the method is used.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...