FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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In the GMP partnership (to which Elan seeks admittance), the capital balances of Mary, Gene, and Pat, who share income in the ratio of
6:3:1, are
Mary
Gene
Pat
$ 271,200
135,600
45,200
Required:
a. If no goodwill or bonus is recorded, how much must Elan invest for a one-third interest?
b. Prepare journal entry for the admission of Elan if she invests $80,300 for a 20 percent interest and goodwill is recorded.
c. Prepare journal entry for the admission of Elan if she invests $201,000 for a 20 percent interest. Total capital will be $653,000; the
partners use the bonus method.
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Transcribed Image Text:In the GMP partnership (to which Elan seeks admittance), the capital balances of Mary, Gene, and Pat, who share income in the ratio of 6:3:1, are Mary Gene Pat $ 271,200 135,600 45,200 Required: a. If no goodwill or bonus is recorded, how much must Elan invest for a one-third interest? b. Prepare journal entry for the admission of Elan if she invests $80,300 for a 20 percent interest and goodwill is recorded. c. Prepare journal entry for the admission of Elan if she invests $201,000 for a 20 percent interest. Total capital will be $653,000; the partners use the bonus method.
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