Original partners share profits and losses equally

Reference no: EM131101839

The ABCD Partnership has the following balance sheet at January 1, 2012, prior to the admission of new partner, Eden.

Cash and current assets	$39,000	Liabilities	$52,000
Land	$234,000	Adams, capital	$26,000
Building and equipment	$130,000	Barnes, capital	$52,000
		Cordas, capital	$117,000
		Davis, capital	$156,000
Total	$403,000	Total	$403,000

Eden contributes $49,000 into the partnership for a 25% interest, The four original partners share profits and losses equally. Using the bonus method, determine the balances for each of the five partners after Eden joins the partnership and post journal entries. Eden's contribution of $49,000 into the partnership raises the total partnership net assets to $400,000. Eden's capital account is credited, by agreement, for 25% of the partnership's total tangible assets, or $100,000.

Reference no: EM131101839

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