The following is the current balance sheet for a localpartnership of doctors:
| | | | | |
| Cash and currentassets | $ | 67,000 | Liabilities | $ | 74,000 |
| Land | | 232,000 | A, capital | | 54,000 |
| Building andequipment (net) | | 181,000 | B, capital | | 74,000 |
| | | C, capital | | 124,000 |
| | | D, capital | | 154,000 |
| Totals | $ | 480,000 | Totals | $ | 480,000 |
|
The following questions represent independentsituations:
E is going to invest enough money in this partnership to receivea 20 percent interest. No goodwill or bonus is to be recorded. Howmuch should E invest?
E contributes $50,000 in cash to the business to receive a 10percent interest in the partnership. Goodwill is to be recorded.Profits and losses have previously been split according to thefollowing percentages: A, 30 percent; B, 10 percent; C, 40 percent;and D, 20 percent. After E makes this investment, what are theindividual capital balances?
E contributes $38,000 in cash to the business to receive a 20percent interest in the partnership. Goodwill is to be recorded.The four original partners share all profits and losses equally.After E makes this investment, what are the individual capitalbalances?
E contributes $72,000 in cash to the business to receive a 20percent interest in the partnership. No goodwill or other assetrevaluation is to be recorded. Profits and losses have previouslybeen split according to the following percentages: A, 10 percent;B, 30 percent; C, 20 percent; and D, 40 percent. After E makes thisinvestment, what are the individual capital balances?
C retires from the partnership and, as per the originalpartnership agreement, is to receive cash equal to 130 percent ofher final capital balance. No goodwill or other asset revaluationis to be recognized. All partners share profits and losses equally.After the withdrawal, what are the individual capital balances ofthe remaining partners?
