What will be the credit to Ds capital account

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Question - The ABC partnership is comprised of A, B, and C. A, B, and C have the following capital balances and profit sharing percentages at a given point in time:

Partner

Capital balance

Profit/loss percentage

A

300,000

20%

B

200,000

30%

C

300,000

50%

TOTAL

800,000

100%

1) D wants to buy into the partnership. D will pay $200,000 for a 10% ownership interest. What will be the credit to D's capital account assuming the bonus method is used?

2) D wants to buy into the partnership. D will pay $200,000 for a 10% ownership interest. What will be the credit to D's capital account assuming the goodwill method is used?

3) D wants to buy into the partnership. D will pay $200,000 for a 10% ownership interest. How much goodwill would be recorded assuming the goodwill method is used?

Reference no: EM133034721

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