Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. at april 30, partners capital balances in crane co

At April 30, partners capital balances in Crane Company are G. Donley $65,520, C. Lamar...

60.1K

Verified Solution

Question

Accounting

At April 30, partners capital balances in Crane Company are G. Donley $65,520, C. Lamar $60,480, and J. Pinkston $22,680. 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.

(a)

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 Pinkstons ownership interest by paying Pinkston $20,160 in cash.
(2) Terrell purchases 331/3% of Lamars ownership interest by paying Lamar $18,900 in cash.
(3) Terrell invests $78,120 for a 30% ownership interest, and bonuses are given to the old partners.
(4) Terrell invests $52,920 for a 30% ownership interest, which includes a bonus to the new partner.

Lamars capital balance is $40,320 after admitting Terrell to the partnership by investment. If Lamars ownership interest is 20% of total partnership capital, what were (1) Terrells cash investment and (2) the bonus to the new partner?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students