Business, 10.03.2020 01:57 Ezekielcassese

At April 30, partners’ capital balances in PDL Company are G. Donley $52,000, C. Lamar $48,000, and J. Pinkston $18,000. The income sharing ratios are 5 : 4 : 1, respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm as a partner. Journalize the admission of Terrell under each of the following independent assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e. g. 5,275.) (1) Terrell purchases 50% of Pinkston’s ownership interest by paying Pinkston $16,000 in cash. (2) Terrell purchases 331/3% of Lamar’s ownership interest by paying Lamar $15,000 in cash. (3) Terrell invests $62,000 for a 30% ownership interest, and bonuses are given to the old partners. (4) Terrell invests $42,000 for a 30% ownership interest, which includes a bonus to the new partner.

Answers: 3

Show answers

Answers

Answer from: jose477

See the explanation below

Explanation:

(1) Terrell purchases 50% of Pinkston’s ownership interest by paying Pinkston $16,000 in cash.

Amount to debit and credit = $18,000 × 50% = $9,000

Debit: Pinkston's capital account - $9,000

Credit: Terrell's Capital account - $9,000

Being the purchase of ownership interest from Pinkston by Terrell

Note that the $16,000 paid by Terrell to Pinkston does not affect the partnership since it is an indirect transaction.

(2) Terrell purchases 331/3% of Lamar’s ownership interest by paying Lamar $15,000 in cash.

Amount to debit and credit = $52,000 × 331/3% = $17,333

Debit: Lamar's capital account - $16,667

Credit: Terrell's Capital account - $16,667

Being the purchase of ownership interest from Lamar by Terrell

Note that the $15,000 paid by Terrell to Lamar does not affect the partnership since it is an indirect transaction.

(3) Terrell invests $62,000 for a 30% ownership interest, and bonuses are given to the old partners.

Terrel's Capital = ($52,000 + $48,000 + $18,000 + $62,000) × 30% = $54,000

Bonus paid to old partners = $62,000 - $54,000 = $8,000

Donley's Capital = $8,000 × (5 ÷ 10) = $4,000

Lamar Capital = $8,000 × (4 ÷ 10) = $3,200

Pinkston Capital = $8,000 × (1 ÷ 10) = $800

The entries are therefore as follows:

Debit: Cash - $62,000

Credit: Terrel's Capital - $54,000

Credit: Donley's Capital - $4,000

Credit: Lamar's Capital - $3,200

Credit: Pinkston's Capital - $800

Being the purchase of ownership interest by Terrel and bonus shared to old partners.

(4) Terrell invests $42,000 for a 30% ownership interest, which includes a bonus to the new partner.

Terrel's Capital = ($52,000 + $48,000 + $18,000 + $42,000) × 30% = $48,000

New partner's bonus = $48,000 - $42,000 = $6,000

Donley's Capital = $6,000 × (5 ÷ 10) = $3,000

Lamar's Capital = $6,000 * 4/10 = $2,400

Pinkston's Capital = $6,000 * 1/10 = $600

The entries are therefore as follows:

Debit: Cash - $42,000

Debit: Donley's Capital - $3,000

Debit: Lamar's Capital - $2,400

Debit: Pinkston's Capital - $600

Credit: Terrel's Capital - $48,000

Being the purchase of ownership interest by Terrel and bonus from old partners to him.

Answer from: Quest

engaging in financial planning?

just took my test

Answer from: Quest

answer; ///deficit;

Another question on Business

Business, 22.06.2019 01:30

Eliminating entries (including goodwill impairment) and worksheets for various years on january 1, 2013, porter company purchased an 80% interest in the capital stock of salem company for$850,000. at that time, salem company had capital stock of $550,000 and retained earnings of $80,000.differences between the fair value and the book value of the identifiable assets of salem company were asfollows: fair value in excess of book valueequipment$130,000land65,000inventory40,000the book values of all other assets and liabilities of salem company were equal to their fair values onjanuary 1, 2013. the equipment had a remaining life of five years on january 1, 2013. the inventory was sold in2013.salem companyâ€™s net income and dividends declared in 2013 and 2014 were as follows: year 2013 net income of $100,000; dividends declared of $25,000year 2014 net income of $110,000; dividends declared of $35,000required: a.prepare a computation and allocation schedule for the difference between book value of equity acquired andthe value implied by the purchase price.b.present the eliminating/adjusting entries needed on the consolidated worksheet for the year endeddecember 31, 2013. (it is not necessary to prepare the worksheet.)lo6lo1

Answers: 1

Answer

Business, 22.06.2019 12:30

Amap from a trade development commission or chamber of commerce can be more useful than google maps for identifying

Answers: 1

Answer

Business, 22.06.2019 13:30

Over the past year, three of the star salesmen at family resorts international's corporate office have been lured away to competitors. on top of that, karina, the general manager of the sales department, has noticed that most employees come in, do their jobs, and leave. family resorts offers a good salary, benefits, and tuition reimbursement, as well as a number of development and training programs. most employees seem contented enough, but karina would like to do something to increase the level of engagement among her staff. what do you think karina should do?

Answers: 1

Answer

Business, 23.06.2019 17:20

Economic analysis indicates that it will be politically more attractive to a. enact expansionary fiscal policy during a recession than to enact restrictive fiscal policy during an economic expansion. b. enact expansionary fiscal policy during an economic expansion than to enact restrictive fiscal policy during a recession. c. enact restrictive fiscal policy during an economic expansion than to enact expansionary fiscal policy during a recession. d. raise taxes than to increase spending.

Answers: 3

Answer

You know the right answer?

At April 30, partners’ capital balances in PDL Company are G. Donley $52,000, C. Lamar $48,000, and...

Questions