eBook Admiltting New Partner With Bonus services. Jenkins and Tanner shared prof
ID: 2538717 • Letter: E
Question
eBook Admiltting New Partner With Bonus services. Jenkins and Tanner shared profits Cody Jenkins and Lacey Tanner formed a partnership to provide landscaping and losses equally, After all the tangible assets have been adjusted to current market prices, the capital accounts of Cody Jenkins and Lacey Tanner have balances of $66,000 and $86,000, respectively. Valeria Solano has expertise the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Tanner thus, Solana is admitted to the partnership at a 30% interest for a purchase price of $41,000. with using deem these skills useful; a. Determine the recipient and amount of the partner bonus. b. Provide the journal entry to admit Solano into the partnership. For a compound transaction, if an amount not require an entry, leave it blank. box does c. Why would a bonus be paid in this situation? offered by Solano. Apparently, Jenkins and Tanner value Previous Next Check My Work 3 more Check My Work uses remaining Save and Exit Submit Assignment for Grading 8 F9 F1O F4 FS F6 F7 F8Explanation / Answer
Answer a. Bonus Method Admission of Solano Solano Investment = $41,000 - 30% Share Total Capital = $66,000 + $86,000 + $41,000 = $193,000 As per Bonus Method, Solano Capital = $193,000 X 30% = $57,900 Balance = $57,900 - $41,000 = $16,900 is a divided between the old partners in the old sharing ratio So, receipient is - Solano - Bonus Amount id $16,900. Answer b. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 1 Cash 41,000.00 Cody Jenkins, Capital 8,450.00 Lacey Tanner, Capital 8,450.00 Solano, Capital 57,900.00 (record the admission of Solano) Answer c. Bonus is paid to Solano because Solano has expertise knowledge of Computer to prepare landscapes designs, cost estimated, etc, which are useful in doing business and company can earn more income due to these skills.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.