A partnership has the following capital balances: Germanese, Capital $640,000 Arent, Capital $250,000 Vertus, Capital $115,000...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A partnership has the following capital balances: Germanese, Capital $640,000 Arent, Capital $250,000 Vertus, Capital $115,000 Profits and losses are currently split 10:7:3 Ryan invests $300,000 to buy a 25% ownership interest. The payment goes to the original partners. Goodwill is to be recognized. a) How much goodwill will be recognized? Is the goodwill going to be allocated to the original partners or Ryan only? b) Calculate the new capital balances for all partners after Ryan joins the partnership. c) Assume that instead, Ryan's capital contribution did not go directly to the partners but went into the business instead. The goodwill method is used. What would be the new capital balances for all partners? d) Assume that instead, Ryan's capital contribution did not go directly to the partners but went into the business instead. The bonus method is used. What would be the new capital balances for all partners? A partnership has the following capital balances: Germanese, Capital $640,000 Arent, Capital $250,000 Vertus, Capital $115,000 Profits and losses are currently split 10:7:3 Ryan invests $300,000 to buy a 25% ownership interest. The payment goes to the original partners. Goodwill is to be recognized. a) How much goodwill will be recognized? Is the goodwill going to be allocated to the original partners or Ryan only? b) Calculate the new capital balances for all partners after Ryan joins the partnership. c) Assume that instead, Ryan's capital contribution did not go directly to the partners but went into the business instead. The goodwill method is used. What would be the new capital balances for all partners? d) Assume that instead, Ryan's capital contribution did not go directly to the partners but went into the business instead. The bonus method is used. What would be the new capital balances for all partners?
Expert Answer:
Answer rating: 100% (QA)
Based on the information provided in the image we need to address the questions about the recognition of goodwill and the new capital balances in a partnership after Ryans investment Lets go through e... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
Posted Date:
Students also viewed these accounting questions
-
In text citation for How a balanced scorecard (BSC) is used. Investopedia. https://www.investopedia.com/terms/b/balancedscorecard.asp
-
The United States Navy Diving Manual contains a wealth of information about diving from the history of diving to underwater physics and physiology. Start by browsing the U.S. Navy Diving Manual and...
-
Describe four different definitions of quality.
-
A hypothetical A-B alloy of composition 40 wt% B-60 wt% A at some temperature is found to consist of mass fractions of 0.66 and 0.34 for the and phases, respectively. If the composition of the ...
-
Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2014 sales forecast is as follows. Quarter HD-240 1 ......... 5,000 2 ......... 7,000 3 ......... 8,000 4 .............
-
(a) A gallon of gasoline contains about \(1.4 \times 10^{8} \mathrm{~J}\) of chemical energy. A car consumes this amount of gasoline in approximately \(30 \mathrm{~min}\) when cruising along a...
-
Hong Corporation encounters the following situations: 1. Hong collects $1,300 from a customer in 2017 for services to be performed in 2018. 2. Hong incurs utility expense which is not yet paid in...
-
19.A radioactive -emission. A detector records n -particles in 2s and by next 2s (accumulatively) it records 1.1 n -particle. Number of -particles recorded by detector after a long time, is (1) 11n...
-
Kayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first...
-
Select two leaders Mahatma Gandhis and Adolf Hitler and write a research paper that states the titles of the leaders, their countries, and their particular leadership settings (e.g. government,...
-
papers. For the first part a summarize in a paragraph psychological knowledge The second part of the pa limitations of the field of p please discuss the follow
-
The market for round trip airline travel from Madison to Cleveland over the Memorial Day holiday consists of two types of customers. Let X 1 denote the demand for airline tickets by students, and let...
-
The Fairway is a golf shop inside the clubhouse of a North Carolina golf course. Derek Dunlop, owner o Fairway, is deciding how much shelf space to devote to each of four different golf ball types....
-
Explain using two examples from the it isn't 3. Do the directors attempt to show both sides of E. documentary.
-
Which is the legal system shared by Saudi Arabia and Pakistan? Explain
-
When a large Omaha Department store moved to a new location, Linda Butler was hired as the new shoe department manager. Harold Knox, who retired, had been the manager at the old location. Lindas...
-
Consider the following cash flows in Table P5.5. (a) Calculate the payback period for each project. (b) Determine whether it is meaningful to calculate a payback period for project D. (c) Assuming...
-
List several provisions of the Sarbanes-Oxley Act that are designed to restore public confidence in the U.S. capital market system.
-
Fergusson Corporation, a U.S. company, manufactures components for the automobile industry. In the past, Fergusson purchased actuators used in its products from a supplier in the United States. The...
-
Ilmanov Ltd. sold a building to a bank at the beginning of 2011 at a gain of $50,000 and immediately leased the building back for a period of five years. The lease is accounted for as an operating...
-
Problem Decide whether the sampling method is independent or dependent. Then determine whether the response variable is qualitative or quantitative. (a) Joliet Junior College decided to implement a...
-
Using the data from Table 2, construct a \(95 \%\) confidence interval estimate of the mean difference, \(\mu_{d}\). By Hand Approach Step 1 Compute the differenced data. Because the sample size is...
-
In the Spacelab Life Sciences 2 payload, 14 male rats were sent to space. Upon their return, the red blood cell mass (in milliliters) of the rats was determined. A control group of 14 male rats was...
Study smarter with the SolutionInn App