Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below. Debra and Merina sell electronic equipment and supplies through their partnership. They wish to expand their computer lines and decide to admit Wayne to the partnership. Debra's capital is $200,000, Merina's capital is $160,000, and they share income in a ratio of 3:2, respectively. Required Record Wayne's admission for each of the following independent situations: a. Wayne directly purchases half of Merina's investment in the partnership for $99,000. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) View transaction list View journal entry worksheet No Event General Journal Debit Credit Merina, Capital 80,000 Wayne, Capital 80,000

Explanation / Answer

Solution a:

Solution b:

2/3 of total captial = $200,000 + $160,000 = $360,000

Total capital of partnership = $360,000 * 3/2 = $540,000

Amount to be invested by Wayne = $540,000 - $360,000 = $180,000

Solution c:

Investment in partnership = $100,000

3/4 of total resulting capital = $360,000

Total required capital of partnership = $360,000 * 4/3 = $480,000

Total captial of partnership after including investment by wayne = $360,000 + $100,000 = $460,000

Estimated goodwill to new partner = $480,000 - $460,000 = $20,000

Solution d:

Investment in partnership = $90,000

New partner's proportionate book value (($360,000+$90000)*25% = $112,500

Difference (Investment is less than book value) = $112,500 - $90,000 = $12,500

Computation of decrease in Inventory value:

1/4 of total resulting capital = $90,000

Estimated total resulting capital = $90000*4 = $360,000

Actual total capital before inventory written down = $360,000 + $90,000 = $450,000

Inventory written down required = $450,000 - $360,000 = $90,000

Solution e:

New partner's proportionate book value = $360,000 * 1/4 = $90,000

1/4th estimated total resulting capital = $89,000 + $52,000 = $141,000

Estimated total capital = $141,000 * 4/1 = $564,000

Total net assets before land revaluation = $360,000

Increase in value of land = $564,000 - $360,000 = $204,000

Note: I have answered more than required parts as per chegg policy, kindly post separate question for answer of remaining parts.

Journal Entries Event Particulars Debit Credit 1 Merina capital Dr $80,000.00               To Wayne Capital $80,000.00 (Being one half share of merina purchased by Wayne)

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