On June 30, partners capital balances in a company are Hassan $60,000. Saad $32,000, and Faheem $30,000.

Fantastic news! We've Found the answer you've been seeking!

Question:

On June 30, partners’ capital balances in a company are Hassan $60,000. Saad $32,000, and Faheem $30,000. The income-sharing ratios are 4:3:1, respectively. On July 1, Admitting Ali to the firm as a partner

Instructions

(a) Journalize the admission of Ali under each of the following independent assumptions.

(1) Ali purchases 40% of Faheem’s ownership interest by paying Faheem $11,000 in cash.

(2) Ali purchases 40% of Saad’s ownership interest by paying Saad $14,000 in cash.

(3) Ali invests $58,000 cash in the partnership for a 40% ownership interest that includes a bonus.

(4) Ali invests $48,000 in the partnership for a 25% ownership interest, and bonus method is used.

(b) Saad’s capital balance is $48,000 after admitting Ali to the partnership by investment. If Saad’s ownership interest is 24% of total partnership capital, what were

Ali’s cash investment (Bonus Method) ……………….