Problem 3

Browning and Douglas are partners who agree to admit Taylor to their partnership. Browning has a capital balance of $51,000 and Douglas has a capital balance of $70,000. Browning and Douglas share net income in the ratio 2:8.

Instructions

Prepare the journal entries to admit Taylor to the partnership based on the following independent agreements. Round all amounts to the nearest dollar.

1. Taylor invests $66,000 cash into the partnership for a 20% interest.
2. Taylor invests $66,000 cash into the partnership for a 30% interest.
3. Taylor purchases one-third of Brownings capital for $25,000.
4. Taylo purchases one-half of Douglas capital for $32,000.