Exercise 1 (LO 3, 4) Entry of a new partner under the goodwill method. Pearson and Murphy have partner capital balances, at book value, of $45,000 and $65,000 as of Decem- ber 31. Pearson is allocated 60% of profits or losses, and Murphy is allocated the balance. The partners believe that tangible net assets have a market value in excess of book value in the amount of $30,000 net. The $30,000 is allocated as follows: Book Value Market Value $120,000 $102,000 258,000 30,000 Accounts receivable 200,000 20,000 Inventory .... Warranty obligations They are considering admitting Warner to the partnership in exchange for total considera- tion of $84,000 cash. In exchange for the consideration, Warner will receive a 30% interest in capital and a 35% interest in profits. 1. Prepare the entries associated with the admission of Warner to the partnership under the goodwill method. 2. If the goodwill suggested by the admission of Warner proved to be worthless, determine by how much Warner would be harmed.

developed in part a(3). etd 189fc64d53a0a6a71 PROBLEM C.11 Dividing Partnership Profit and LossLOC-10 Rothchild Furnishings, Inc., has three partners-Axle, Brandt, and Conrad. At the beginning of the current year their capital balances were: Axle, $180,000; Brandt, $140,000; and Conrad, $80,000. The partnership agreement provides that partners shall receive salary allowances as follows: Axle, $10,000; Brandt, $50,000; and Conrad, $28,000. The partners shall also be allowed 12 percent interest annually on their capital balances. Residual profit or loss is to be divided: Axle, one-half; Brandt, one-third; and Conrad, one-sixth. Instructions Prepare separate schedules showing how income will be divided among the three partners in each of the following cases. The figure given in each case is the annual partnership net income or loss to be allocated among the partners. Round calculations to the nearest dollar. a. Income of $526,000. b. Income of $95,000. c. Loss of $32,000. PROBLEM C.12 Who…

Soultion for Part B   Part B (2020)                                   a. On December 31, 2020 new partner D invests other assets into the partnership for a one-quarter ownership interest. An equal amount of capital is contributed by A, B, and C to make up the difference. At December 31, 2020, the partners' capital balances are as follows:         A   $200,000                 B   180,000                 C   190,000                    $   570,000                                   Fair value of other assets from D                 $50,000                                 b. Immediately after this, partner C withdraws from the partnership. She is paid in cash the balance in her capital account plus a bonus, contributed equally from the capital balances of A, B, and D.         Bonus paid to C  $      18,000                                   Required                 5 Prepare necessary adjusting entries at December 31, 2020 to record the admission of…

Admitting New Partner With Bonus L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and Lipscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $9,000. The capital balances of each partner are $74,500 and $103,000, respectively, prior to the revaluation. Question Content Area a. Provide the journal entry for the asset revaluation. For a compound transaction, if an amount box does not require an entry, leave it blank. blank EquipmentL. Bowers, CapitalL. Bowers, DrawingV. Lipscomb, DrawingM. Ortiz, Capital - Select - - Select -   CashEquipmentL. Bowers, DrawingV. Lipscomb, CapitalM. Ortiz, Capital - Select - - Select -   EquipmentL. Bowers, CapitalV. Lipscomb, CapitalM. Ortiz, CapitalM. Ortiz, Drawing - Select - - Select - Question Content Area b. Provide the journal entry for Ortiz’s admission under the following independent situations: 1. Ortiz purchased a 20%…

Please show work 1. Nan and Lew formed an equal partnership. Nan contributes property with an adjusted basis of $75,000 to a partnership. The property has a fair market value of $120,000 on the date of the contribution.   a. What is the partnership’s basis in the property contributed by Nan?   $ _________________   b. What is the amount of gain recognized by Nan in this transaction?   $ __________________   c. Lew performs services valued at $105,000 for the partnership for his one-third interest in the partnership.   Income or gain recognized $____________ His basis in the Partnership interest $____________

Ending Partner balances Burns and Allan have formed a partnership and invested $20.000 and $40,000, respectively. They have agreed to share profits as follows: 1) Burns is to receive a "salary" of $20.000 and Allan is to receive a "salary" of $30,000. 2) $30.000 is to be allocated according to their original capital contributions to the partnership. 3) The remainder is to be allocated 2:3 respectively Assuming that the business had a loss of $15000, allocate the loss to Burns and Allan.

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