Reference no: EM132753268
The ABC partnership is comprised of A, B, and C. A, B, and C have the following capital balances and profit sharing percentages at a given point in time:
Partner Capital balance Profit/loss percentage
A 300,000 20%
B 200,000 30%
C 300,000 50%
TOTAL 800,000 100%
Problem 1) D wants to buy into the partnership. D will pay $200,000 for a 10% ownership interest. What will be the credit to D's capital account assuming the bonus method is used?
Problem 2) D wants to buy into the partnership. D will pay $200,000 for a 10% ownership interest. What will be the credit to D's capital account assuming the goodwill method is used?
Problem 3) D wants to buy into the partnership. D will pay $200,000 for a 10% ownership interest. How much goodwill would be recorded assuming the goodwill method is used?
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