Prepare the journal entry to record Jeffrey entrance

Assignment Help Financial Accounting
Reference no: EM133054112

Question - The Prince-Robbins partnership has the following capital account balances on January 1, 2021:

Prince, Capital $125,000

Robbins, Capital 115,000

Prince is allocated 70 percent of all profits and losses with the remaining 30 percent assigned to Robbins after interest of 6 percent is given to each partner based on beginning capital balances.

On January 2, 2021, Jeffrey invests $70,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction, 6 percent interest is still to go to each partner. Profits and losses will then be split as follows: Prince (50 percent), Robbins (30 percent), and Jeffrey (20 percent). In 2021, the partnership reports a net income of $20,000.

Required -

1. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2021.

2. Prepare a schedule showing how the 2021 net income allocation to the partners should be determined.

Reference no: EM133054112

Questions Cloud

Explain the technological revolution : What was Barnett referring to when he says at "changes in the law," "the growth of large corporations," occupational changes," and technological revolution," ar
Google and china case guiding questions : Google and China Case Guiding Questions: 1) Identify the parties, issues, positions, and interests in this high-profile negotiation.
How large will the annual payments be : Question - Annuity payments - On December 31' Sen-Nan Chen borrowed $110,000, How large will the annual payments be
Example of fdi or offshoring : Are the following an example of FDI or offshoring? If it's a FDI, is it horizontal or vertical? Explain your reasonings.
Prepare the journal entry to record Jeffrey entrance : On January 2, 2021, Jeffrey invests $70,000 cash for a 20 percent interest in the partnership. Prepare the journal entry to record Jeffrey entrance
Compute the weighted-average number of shares outstanding : Bramble Corporation had 312,000 shares of common stock outstanding on January 1, 2017. Compute the weighted-average number of shares outstanding
Calculate the Sales Revenue for the entire Month of May : The company uses FIFO Date Description Units / $s and the perpetual method of inventory. Calculate the Sales Revenue for the entire Month of May
What is the breakeven price of the option : An investor enters into a call option on Darcy's shares with an exercise price of $4.30 per share in two months, What is the breakeven price of the option
What is the equivalent annual cost of the contract : Improvised explosive devices (IEDs) are responsible for many deaths in times of strife and war. What is the equivalent annual cost of the contract

Reviews

Write a Review

Financial Accounting Questions & Answers

  Calculate the residual income

Calculate the residual income (RI) for each of the two divisions separately, if the desired rate of return is 20%

  Produces leather handbags

Albertville Inc. produces leather handbags. The production budget for the next four months is: July 5,000 units, August 7,000, September 7,500, October 8,000. Each handbag requires 0.5 square meters of leather. Albertville Inc.’s leather inventory po..

  Prepare income statement for the year ended 30th june

Prepare an income statement for the year ended 30th June 2014 given the following account balances. Note: Some accounts may not be relevant.

  What tax issues regarding exchanges should mary and peter

At the same time, Peter contributes $15,000 in cash for 15 newly issued Trenton shares. What tax issues regarding the exchanges should Mary and Peter consider?

  Premium theory of the term structure of interest rates holds

Suppose we observe the following rates: 1R1= .10, 1R2= .16, and E (2r1) = .10. If the liquidity premium theory of the term structure of interest rates holds, what is the liquidity premium for year 2?

  Calculate the after tax cost of each of the sources

The Shocking Corporation is subject to a company tax rate. The company asks you to calculate the after tax (where relevant) cost of each of the sources of funds

  What was the sum of the original cost of the two pieces

A closing balance of $560,000 in accumulated depreciation. What was the sum of the original cost of the two pieces of equipment sold in 2019?

  How much will operating income be

Ancinas Company produces printers and uses a standard part. If Ancinas Company makes the part, how much will its operating income be?

  What do Mondelez customers owe the company at December

Analyzing the Allowance for Uncollectible Accounts - What do Mondelez's customers owe the company at December 31, 2018 ($ millions)

  Create a budget for Ann income

Create a budget for Ann's income and expenses to assist her to meet her objective. Clearly state Ann's short-term goal

  What will be the company payout ratio the year

Stargell Industries follows The company forecasts that its net income will be $3,500,000. What will be the company's payout ratio this year?

  What was the consulting firms revenue for the year

On December 31, 2016, it had accounts receivable of $100,000. On an accrual basis, what was the consulting firm's revenue for the year 2016?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd