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Sheet2

Complete the following two problems.
Problem 1
Todd is interested in investing in Charger partnership for a 30% interest; however, the current partners are concerned how the addition of new partner will impact their current partnership capital accounts. The capital balances at the beginning of the year are Chad (40%) $80,000; Adam (40%) $50,000; and Alex (20%) $65,000
Prepare the journal entry (in Word or Excel) for each of the following scenarios:
a. Todd invests $100,000 cash using the bonus method.
b. Todd invests $75,000 cash using the bonus method.
c. Todd invests $90,000 cash using the goodwill method.
Problem 2
ABCD Partnership has decided to dissolve the partnership. As part of dissolution, all the assets will be sold and existing liabilities paid in full.
Assets
Cash 65,000
Land 145,000
Building 120,000
Total 330,000
Liabilities and Capital
Liabilities 55,000
Partner A, Capital 81,500
Partner B, Capital 40,000
Partner C, Capital 62,000
Partner D, Capital 91,500
Total liabilities and capital 330,000
Using the information provided above, use Word or Excel to create journal entries that show how each of the following independent scenarios should be handled.
Scenario 1: The $10,000 cash that exceeds the partnership's liabilities is to be disbursed immediately. If profits and losses are allocated to Partner A, Partner B, Partner C, and Partner D on a 2:3:3:2 basis, respectively, how will the $10,000 be divided?
Scenario 2: The $10,000 cash that exceeds the partnership's liabilities is to be disbursed immediately. If profits and losses are allocated to Partner A, Partner B, Partner C, and Partner D on a 2:2:3:3 basis, respectively, how will the $10,000 be divided?
Scenario 3: The building is immediately sold for $80,000 to give total cash of $142,000. Following the sales, the liabilities are paid, leaving a cash balance of $90,000. This cash is to be distributed to the partners. How will the cash be divided if profits and losses are allocated to Partner A, Partner B, Partner C, and Partner D on a 1:3:3:3 basis, respectively? 

problem 1

Journal entries
1a. Using Bonus method
Dr Cr
Cash (a/c) $ 100,000
Chad Capital $ 4,600 40%
Adam Capital $ 4,600 40%
Alex capital $ 2,300 20%
Todd capital $ 88,500
To record admission of Todd to the partnership with cash asset
$100,000 to aquire a 30% capital share.
Calulations:
Chad 40% $ 80,000
Adam 40% $ 50,000
Alex 20% $ 65,000
Todd $ 100,000
Total $ 295,000
Todd capital 30% of $295,000 $88,500
Bonus due to Todd-$100,000-88,500 $11,500
1b.Using Bonus method
Dr Cr
Cash a/c $75,000
Chad Capital $2,400 40%
Adam Capital $2,400 40%
Alex capital $1,200 20%
Todd capital $81,000
To record admisssion of Todd into the partnership with a cash
asset of $75,000 aquiring 30% share capital
Calculations:
30% of $270,000 $81,000
81,000-75,000 $6,000
1c. Using goodwill method
Goodwill recognition
DR CR
Goodwill $15,000
Chad a/c $6,000 40%
Adam a/c $6,000 40%
alex a/c $3,000 20%
To record regognition of goodwill on admission of partner
Write off to good will
DR CR
Chad capital a/c(28%) $4,200
Adam capital a/c(28%) $4,200
Alex capital(14% $2,100
Todd capital(30%) $4,500
Goodwill a/c $15,000
Calcuations:
Assumed capital $90,000/30% $ 300,000
Actual $ 285,000
Goodwill assumed-actual $ 15,000

problem 2

Journal entries
2a. Scenario1(p/l sharing ratio 2:3:3:2
Dr Cr
Partner A $ 2,000 2
Partner B $ 3,000 3
Partner C $ 3,000 3
Partner D $ 2,000 2
Cash A/c cash $ 10,000
To record allocation of cash to partners after dissolution
2b.Scenario 2(2:2:3:3) Dr Cr
Partner A $2,000 2
Partner B $2,000 2
Partner C $3,000 3
Partner D $3,000 3
Cash A/c cash $10,000
To record allocation of cash to partners after payment of liabilities
2c.Scenario 3(1:3:3:3)
DR Cr
Cash A/c 90,000
Building a/c 90000
DR CR
Partner A $9,000 1
Partner B $27,000 3
Partner C $27,000 3
Partner D $27,000 3
Cash A/c cash $90,000