Assume that Charlotte acquired a 20% interest in the partnership by contributing a total of $75,000 directly to the other four partners. Goodwill is to be recorded. Profits and losses have previously been split according to the following percentages: Eleanor, 15%; Lauren, 25%; Graham, 35%; Vaughn, 25%. Assume the following balance sheet is in place at the time of the contribution. Cash and current assets $ 39,000 Liabilities $ 52,000 Land 234,000 Eleanor, capital 26,000 Building and equipment 130,000 Lauren, capital 52,000 Graham, capital 117,000 Vaughn, capital 156,000 Total $ 403,000 Total $ 403,000 Required: a. Prepare the journal entry or entries required to record the admission of Charlotte. b. What were the individual capital balances after Charlotte made her investment?

Answer rating: 100% (QA)

To record Charlottes admission to the partnership and determine the individual capital balances ... View the full answer