Check my work Required information Part 2 of 2 The following

Check my work Required information Part 2 of 2 [The following information applies to the questions displayed below. 1.9 points Meir, Benson, and Lau are partners and share income and loss in a 3:2:5 ratio. The partnership\'s capital balances are as follows: Meir, $118,000; Benson, $79,000; and Lau, $203,000. Benson decides to withdraw from the partnership, and the partners agree not to have the assets revalued upon Benson\'s retirement. Skipped Assume that Benson does not retire from the partnership described in Part 1. Instead, Rhode is admitted to the partnership? February 1 with a 25% equity Prepare journal entries to record Rhode\'s entry into the partnership under each of the following separate assumptions: Rhode invests (a) $133,333; (b) $97,333; and (c) $174,666. (Do not round your intermediate calculations.) eBook Print References View transaction list Journal entry worksheet 3

Solution

Solution a:

Ratio of profit between Meir, Benson and Lau = 3:2:5

Total capital after new capital introduced by Rhode = $118,000 + $79,000 + $203,000 + $133,333 = $533,333

Rhode share in Partnership = 25%

Therefore required share of capital by Rhode = 533333 * 25% = $133,333

As required captial and actual capital invested by Rhode, therefore no bonus capital will be recorded.

Solution b:

Ratio of profit between Meir, Benson and Lau = 3:2:5

Total capital after new capital introduced by Rhode = $118,000 + $79,000 + $203,000 + $97,333 = $497,333

Rhode share in Partnership = 25%

Therefore required share of capital by Rhode = 497333 * 25% = $124,333

As capital introduced by Rhode is lesser by $27,000 therefore old partner capital share will be given to Rhode in their profit sharing ratio i.e. 3:2:5

Solution 3:

Ratio of profit between Meir, Benson and Lau = 3:2:5

Total capital after new capital introduced by Rhode = $118,000 + $79,000 + $203,000 + $174,666 = $574,666

Rhode share in Partnership = 25%

Therefore required share of capital by Rhode = 574666 * 25% = $143,666

Bonus Capital introduced by Rhode = $174,666 - $143,666 = $31,000

Bonus capital will be distributed in old partners in ratio of 3:2:5

Journal Entries
S. No.	Particulars	Debit	Credit
1	Cash Dr	$133,333.00
	To Rhode\'s Capital		$133,333.00
	(Being capital introduced by new partner)