Ch 123 Exercises and Problems Admitting New Partners Who Buy

Ch 12-3 Exercises and Problems Admitting New Partners Who Buy an Interest and Contribute Assets The capital accounts of Trent Henry and Tim Chou have balances of $178,000 and $128,000, respectively. LeAnne Gilbert and Becky Clarke are to be admitted to the partnership. Gilbert buys one-fifth of Henry\'s interest for $40,900 and one-fourth of Chou\'s interest for $28,200. Clarke contributes $43,400 cash to the partnership, for which she is to receive an ownership equity of $43,400. a1. Journalize the entry to record the admission of Gilbert. For a compound transaction, if an amount box does not require an entry, leave it blank. a2. Journalize the entry to record the admission of Clarke. b. What are the capital balances of each partner after the admission of the new partners? Partner Trent Henry Capital Balance LeAnne Gilbert Becky Clarke

Solution

a1 Trent Henry, Capital 35600 =178000/5 Tim Chou, Capital 32000 =128000/4         LeAnne Gilbert, capital 67600 a2 Cash 43400        Becky Clarke, capital 43400 b Partner Capital Balance Trent Henry 142400 =178000-35600 Tim Chou 96000 =128000-32000 LeAnne Gilbert 67600 Becky Clarke 43400