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Leo, Amanda, and Nancy are partners with the following capital balances and profit-and-loss sharing ratios:
Leo (30%) $500,000
Amanda (25%) 300,000
Nancy (45%) 650,000
Required:
Problem a: Prepare the journal entries to admit Tim into the partnership and calculate the partners' capital balances immediately after his admission under each of the following independent scenarios:
1. Amanda assigns half of her interest to Tim for $200,000.
2. Tim invests $100,000 cash in the partnership for a 20% interest in the partnership capital and profits and the partnership assets are revalued.
3. Tim invests $170,000 cash in the partnership for a 10% interest in the capital and profits of the partnership and the partnership assets are revalued.
4. Tim invests $350,000 cash in the partnership for a 20% interest in the capital and profits of the partnership and the partnership assets are not revalued.
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