Chapter 12, Problem P12.26APGA

To determine

Concept Introduction:

Partnership: Partnership is one of the types of business origination. Under the partnership, two or more individuals agree to form a business together and share losses and profits in the predetermined ratio.

Admission of a partner: An existing partnership may admit a new partner and a new partnership is formed. The accounting of admission of new partner depends upon the way of admission of the partner. A new partner may admit in an existing firm in following ways:

1. By bringing a new asset or cash
2. By purchasing the interest in partnership from existing partners of the firm
3. By paying the bonus for the goodwill of the firm
4. By receiving the bonus for goodwill

Requirements: 1

To prepare: The Journal entries for the addmission of Young as a partner on July 31 when Young pays Longval $ 168,000 cash to purchase Longvals interest.

To determine

Requirements: 2

To prepare: The Journal entries for the addmission of Young as a partner on July 31 when Young contributes $84,000 to the partnership, acquiring a ¼ interest in the business.

To determine

Requirements: 3

To prepare: The Journal entries for the addmission of Young as a partner on July 31 when

Young contributes $ 84,000 to the partnership , acquiring a 1/6 interest in the business.

To determine

Requirements: 4

To prepare: The Journal entries for the addmission of Young as a partner on July 31 when

Young contributes $ 84,000 to the partnership , acquiring a 1/3 interest of the business.