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Carson, Letterman, and O'Brien are partners who share profits and losses 50%, 30%, and 20%, respectively. Their capital balances are $100,000, $60,000, and $40,000, respectively.
Instructions
(a) Assume Stewart joins the partnership by investing $80,000 for a 25% interest with bonuses to the existing partners. Prepare the journal entry to record his investment.
(b) Assume instead that Carson leaves the partnership. Carson is paid $120,000 with a bonus to the retiring partner. Prepare the journal entry to record Carson's withdrawal.
Grace provides 52% of the household costs for her widowed mother during the year. Grace claims her mother as a dependent. Can Grace file a return as head of Household if her mother does not live with her? Explain the reason behind your answer?
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