17. Lear is to become a partner in the WS partnership by paying $80,000 in cash to the business. At present, the capital balance for Hamlet is $70,000 and for MacBeth is $40,000. Hamlet and MacBeth share profits on a 7:3 basis. Lear is acquiring 40 percent of the new partnership. a. If the goodwill method is applied, what will the three capital balances be following the payment by Lear? b. If the bonus method is applied, what will the three capital balances be following the payment by Lear? LO 14-9 18. The Distance Plus partnership has the following capital balances at the beginning of the current year along with respective profit and loss percentages: Tiger (50%) $85,000 Phil (30%) 60,000 Ernie (20%) 55,000 Each of the following questions should be viewed independently. Page 699 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 goodwill method is used. 7. A partnership has the following balance sheet prior to liquidation (partners' profit and loss ratios are in parentheses): Cash Other assets $ 33,000 Liabilities 100,000 Playa, capital (40%) Bahia, capital (30%) Arco, capital (30%) $133,000 Total $ 50,000 24,000 29,000 30,000 $133,000 Total During liquidation, other assets are sold for $80,000, liabilities are paid in full, and $15,000 in liquidation expenses are paid. Based on the final statement of partnership liquidation, what amount of cash does each partner receive as a result of this liquidation? a. Playa, $6,000; Bahia, $4,500; Arco, $4,500 b. Playa, $10,000; Bahia, $18,500; Arco, $19,500 c. Playa, $16,000; Bahia, $23,000; Arco, $24,000 d. Playa, $19,200; Bahia, $14,400; Arco, $14,400