Problem 1:Clinton and Schultz are equal partners in DEMO partnership and they have the following...

Question

Problem 1:Clinton and Schultz are equal partners in DEMO partnership and they have the following balance sheet:											assets $500,000											Liabilities $300,000											Clinton Capital			150,000							Schultz capital			50000											They decide to bring in a new partner Sanders who pays $500,000 to be an equal partner															A) make the journal entry the partnership makes if they use the bonus method							B) make the journal entry the partneship makes if they use the goodwill method											Instead of giving the $500,000 to the partnership, Sanders gave $250,000 to each Clinton and Schultz											C) make the journal entry the partnership makes if they use the bonus method							D) make the journal entry the partnership makes if they use the goodwill methodProblem 2:																						THE PARTNERSHIP OF LIONS, TIGERS AND BEARS HAS BEEN EXISTED SINCE 1945, BUT NOW THEY																			HAVE DECIDED TO DISSOLVE THE PARTNERSHIP.																			PARTNERS SHARE PROFITS AND LOSSES EQUALLY																			THEIR JANUARY 1, 2016 BALANCE SHEET IS PRESENTED BELOW:																															CASH							50000																			ACCOUNTS RECEIVABLE							100000																			LAND							200000																			EQUIPMENT NET							200000																			PATENT							100000																			TOTAL ASSETS							650000																															ACCOUNTS PAYABLE							300,000																															LIONS CAPITAL							200000																			TIGERS' CAPITAL							120,000																			BEAR'S CAPITAL							30000																															A) ON JANUARY 1 WHAT IF ANY SAFE PAYMENTS CAN EACH OF THE PARTNERS TAKE?																															B)							ON JANUARY 30TH THEY SOLD THE LAND FOR $120,000																			IF NO PARTNERS TOOK ANY SAFE PAYMENTS ON JANUARY 1ST WHAT SAFE PAYMENTS CAN EACH TAKE NOW?																															C)							ON FEBRUARY 28TH THE PARTNERSHIP SOLD THE RECEIVABLES FOR $90,000																			IF SHE COULD, TIGERS WOULD HAVE TAKEN A SAFE PAYMENT AT THE END OF JANUARY																															WHAT SAFE PAYMENTS CAN EACH PARTNER NOW TAKE?																															D)							ON MARCH 31ST THE PARTNERSHIP SOLD THE PATENT FOR $80,000																			IF SHE COULD TIGERS WOULD HAVE TAKEN ANY A SAFE PAYMENT AT THE END OF FEBRUARY																															ON MARCH 31 WHAT CAN EACH PARTNER TAKE AS A SAFE PAYMENT?																															E) ON APRIL 30TH THE PARTNERSHIP SELLS THE EQUIPMENT FOR $10,000 AND PAYS OFF THE ACCOUNTS PAYABLE																															IF ALL PARTNERS ARE INSOLVENT, HOW MUCH DOES EACH PARTNER GET AT THE END OF THE PARTNERSHIP?																															F) USING THE INFORMATION FROM E): IF ANY ALL PARTNERS ARE SOLVENT AND CAN COVER ANY DEBTS HOW MUCH																			DOES EACH PARTNER RECEIVE OR PAY AT LIQUIDATION?

Robert · Accepted Answer

Problem 1: 
A) Total capital after new partner = 150000 + 50000 + 500000 = 700000 
Share of new partner = 700000 * 1 /3 = 233333 
Journal entry: 
Dr Cash         5,00,000.00
Cr Clinton capital
      1,33,333.50 
Cr Schultz capital
      1,33,333.50 
Cr Sander capital
      2,33,333.00 
B) Value of business = 500000 * 3 = 1500000 
Goodwill = 1500000 - 200000 = 1300000 
Journal entries: 
Dr Cash         5,00,000.00
Cr Sander capital
      5,00,000.00 
Dr Cash       13,00,000.00
Cr Clinton capital
      6,50,000.00 
Cr Schultz capital
      6,50,000.

Problem 1: Clinton and Schultz are equal partners in DEMO partnership and they have the following balance sheet: assets $500,000 Liabilities $300,000 Clinton Capital 150,000 Schultz capital 50000 They...

Answer To: Problem 1: Clinton and Schultz are equal partners in DEMO partnership and they have the following...

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment