Theresa Trueheart and Ethel Hardachre wish to add a new partner to their partnership. Dave Vader...

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Theresa Trueheart and Ethel Hardachre wish to add a new partner to their partnership. Dave Vader wants to join, and the current partners decide to give a 22.5% interest in the company, for a cash investment of $36,600. Any bonus/deficit on admitting Dave will be split by Theresa and Ethel in direct ratio to their capital accounts. Additional information: Partner equity, Theresa Trueheart: $48,800 Ethel Hardachre: $35,400. Required: Show the calculations to add Dave Vader to the partnership and the journal entry to record the transaction. Theresa Trueheart and Ethel Hardachre wish to add a new partner to their partnership. Dave Vader wants to join, and the current partners decide to give a 22.5% interest in the company, for a cash investment of $36,600. Any bonus/deficit on admitting Dave will be split by Theresa and Ethel in direct ratio to their capital accounts. Additional information: Partner equity, Theresa Trueheart: $48,800 Ethel Hardachre: $35,400. Required: Show the calculations to add Dave Vader to the partnership and the journal entry to record the transaction.

Answer rating: 100% (QA)

First we need to calculate the total capital in the partnership before admitting Dave Vader Theresa Truehearts capital 48800 Ethel Hardachres capital 35400 Total capital 48800 35400 84200 Next we will ... View the full answer