At April 30, partners' capital balances in Ivanhoe Company are G. Donley $44,720, C. Lamar $41,280, and J. Pinkston $15,480. The income sharing ratios are 5: 4:1, respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm as a partner. (a) Journalize the admission of Terrell under each of the following independent assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.) (1) Terrell purchases 50% of Pinkston's ownership interest by paying Pinkston $13,760 in cash. Terrell purchases 33¹/3% of Lamar's ownership interest by paying Lamar $12,900 in cash. (2) (3) Terrell invests $53,320 for a 30% ownership interest, and bonuses are given to the old partners. Terrell invests $36,120 for a 30% ownership interest, which includes a bonus to the new partner. (4)

At April 30, partners' capital balances in Ivanhoe Company are G. Donley $44,720, C. Lamar $41,280, and J. Pinkston $15,480. The income sharing ratios are 5: 4:1, respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm as a partner. (a) Journalize the admission of Terrell under each of the following independent assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.) (1) Terrell purchases 50% of Pinkston's ownership interest by paying Pinkston $13,760 in cash. Terrell purchases 33¹/3% of Lamar's ownership interest by paying Lamar $12,900 in cash. (2) (3) Terrell invests $53,320 for a 30% ownership interest, and bonuses are given to the old partners. Terrell invests $36,120 for a 30% ownership interest, which includes a bonus to the new partner. (4)

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter19: Accounting For Partnerships

Section: Chapter Questions

Problem 7SPA

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