Debra and Merina sell electronic equipment and supplies through their partnership. They wish to expand their computer
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Debra and Merina sell electronic equipment and supplies through their partnership. They wish to expand their computer lines and decide to admit Wayne to the partnership. Debra\'s capital is $190,000, Merina\'s capital is $152,000, and they share income in a ratio of 3:2, respectively.
1. Record Wayne\'s admission for each of the following independent situations: Wayne directly purchases half of Merina\'s investment in the partnership for $96,000 |
2. Wayne invests the amount needed to give him a one-third interest in the partnership\'s capital if no goodwill or bonus is recorded. Record Wayne\'s investment, for one-third interest; no goodwill or bonus. |
3. Wayne invests $100,000 for a 25 percent interest. Goodwill is to be recorded. Record Wayne\'s investment of $100,000 for a one-fourth interest; goodwill. |
4. Debra and Merina agree that some of the inventory is obsolete. The inventory account is decreased before Wayne is admitted. Wayne invests $100,000 for a 25 percent interest. Record the write-down of inventory. |
5. Wayne directly purchases a 25 percent interest by paying Debra $81,000 and Merina $53,000. The land account is increased before Wayne is admitted. Record the revaluation of land. |
6. Wayne invests $63,000 for a 20 percent interest in the total capital of $405,000. Record Wayne\'s investment of $63,000 for the one-fifth interest given that the total capital is $405,000. |
7. Wayne invests $103,000 for a 20 percent interest. Goodwill is to be recorded. Record the entry for goodwill. |
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
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