Record the entry of furley using the goodwill method

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Shirly, Curley, and Burley are partners sharing profits and losses 40/40/20 respectively.

Their capital balances are:

Shirley 175,000

Curley 300,000

Burley 275,000

750,000

Question 1: Assume Furley puts into the partnership $350,000 of cash and is awarded a 40% interest. Record the entry of Furley using the goodwill method.

Question 2: In the first year after Furley's entrance under the conditions outlined in 'c' above, an agreement was made to share profits, whereby Burley gets a salary of $40,000, and each partner receives 10% interest on their beginning capital balances with the remainder shared equally. Unfortunately, there was a loss of $200,000. The agreement was silent on how to share losses. Record a schedule showing how the loss will be shared.

Reference no: EM132873496

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