Reference no: EM131139247
Problem 12-4A
At April 30, partners' capital balances in PDL Company are: G. Donley $47,300, C. Lamar $46,200, and J. Pinkston $17,200. The income sharing ratios are 5 : 4 : 1, respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm as a partner.
Journalize the admission of Terrell under each of the following independent assumptions.
(1) Terrell purchases 50% of Pinkston's ownership interest by paying Pinkston $15,110 in cash.
(2) Terrell purchases 331/3% of Lamar's ownership interest by paying Lamar $14,630 in cash.
(3) Terrell invests $64,000 for a 30% ownership interest, and bonuses are given to the old partners.
(4) Terrell invests $41,700 for a 30% ownership interest, which includes a bonus to the new partner.
Lamar's capital balance is $31,010 after admitting Terrell to the partnership by investment. If Lamar's ownership interest is 20% of total partnership capital, what were Terrell's cash investment and the bonus to the new partner?
Problem 12-5A
On December 31, the capital balances and income ratios in TEP Company are as follows.
|
Partner
|
Capital Balance
|
Income Ratio
|
|
Trayer
|
$56,807
|
50%
|
|
Emig
|
36,029
|
30%
|
|
Posada
|
31,390
|
20%
|
Journalize the withdrawal of Posada under each of the following assumptions.
(1) Each of the continuing partners agrees to pay $18,426 in cash from personal funds to purchase Posada's ownership equity. Each receives 50% of Posada's equity.
(2) Emig agrees to purchase Posada's ownership interest for $24,850 cash.
(3) Posada is paid $36,190 from partnership assets, which includes a bonus to the retiring partner.
(4) Posada is paid $22,246 from partnership assets, and bonuses to the remaining partners are recognized.
If Emig's capital balance after Posada's withdrawal is $39,914, what were the total bonus to the remaining partners and the cash paid by the partnership to Posada?
Attachment:- Problems.rar