Answer all please Pelletier has $103,500 capital and Helmen has $55,500 capital
ID: 2436913 • Letter: A
Question
Answer all please
Pelletier has $103,500 capital and Helmen has $55,500 capital in the Pelletier & Helmen partnership. Pelletier and Helmen share profits and losses equally. Todd Parker contributes cash of $53,000 to acquire a 1/4 interest in the new partnership. Requirements 1. Calculate Parker's capital in the new partnership 2. Journalize the partnership's receipt of the $53,000 from Parker Requirement 1. Calculate Parker's capital in the new partnership. (Leave unused cells blank. Do not enter a "O" for a zero balance.) Partnership capital before admission of new partner Contribution of new partner Partnership capital after admission of new partner Capital of new partner Bonus to Requirement 2. Journalize the partnership's receipt of the $53,000 from Parker. (Record debits first, then credits. Select the explanation on the last line of the journal ent table.) Date Accounts and Explanation Debit Credit A company invested $45,000 in Yale Co. stock. The investment represented 5% ofthe voting stock of Yale Co. If the Yale Co. stock investment paid dividends, what account would be credited? OA. Cash O B. Dividend Revenue O C. Long-term Investments-Available-for-Sale D. Interest Revenue Suppose Warehouse Quality Furniture issued 350,000 shares of S0.01 par common stock at $4 per share. Which journal entry correctly records the issuance of this stock? Date Accounts and Explanation Debit Credit OA Cash 1,400,000 Common Stock-$0.01 Par Value 1,400,000 Common Stock-$0.01 Par Value 1,400,000 Cash 3,500 Paid-In Capital in Excess of Par-Common 1,396,500 1,400,000 Common Stock-$0.01 Par Value 3,500 Paid-In Capital in Excess of Par-Common 1,396,500 Common Stock-$0.01 Par Value 1,400,000 Cash 1,400,000Explanation / Answer
(1)
PARKERS CAPITAL IN THE NEW PARTNERSHIP
TOTAL CAPITAL = $53000*4/1 OR $103500+ $55500 + $53000
= $212000
NEW RATIO CALCULATION
OLD RATIO OF OLD PARTNERS = 1:1
NEW PARTNER RATIO = 1/4
REMAINING SHARE FOR OLD PARTNERS = 1-1/4
= 3/4
OLD PARTNER NEW RATIO = 1/2*3/4
= 3/8
NEW PARTNER RATIO =1/4*2/2
=2/8
NEW RATIO = 3:3:2
NEW PARTNER CAPITAL IN NEW PARTNERSHIP = $212000*2/8
= $53000
(2)
JOURNAL ENTRIES ON PARKER ADMISSION
(A) ON RECEIPT OF CONTRIBUTION FROM PARKER
CASH A/C DEBIT. $53000
TO PREMIUM FOR GOODWILL A/C $53000
(CASH CONTRIBUTION RECEIPT ON ADMISSION OF PARKER)
(B) ON DISTRIBUTION OF SUCH AMOUNT IN OLD PARTNERS IN SACRFICING RATIO
PREMIUM FOR GOODWILL A/C DEBIT. $53000
TO PELLETIER CAPITAL A/C $26500
TO HELMEN CAPITAL A/C $26500
(PREMIUM FOR GOODWILL DISTRIBUTED IN OLD PARTNERS IN SACRICING RATIO OF 1:1)
NOTE: SACRIFICING RATIO = OLD RATIO - NEW RATIO (IF POSITIVE THERE IS SACRIFICE OTHERWISE IT IS GAIN)
PELLETIER SHARE = 1/2 - 3/8
= (4-3)/8
=1/8
HELMEN SHARE = 1/2 - 3/8
= (4-3)/8
= 1/8
SACRIFICING RATIO = 1:1
(3) DECLARATION OF DIVIDEND IS JOURNALISED AS FOLLOWS :
RETAINED EARNINGS A/C DEBIT. XX
TO DIVIDENDS PAYABLE A/C. XX
ON PAYMENT OF DIVIDENDS
DIVIDENDS PAYABLE A/C DEBIT. XX
TO CASH A/C XX
SO THE CORRECT OPTION IS (A) CASH A/C
(4) STOCK ISSUANCE JOURNAL ENTRY
CORRECT OPTION IS (C)
CASH A/C DEBIT. $1400000
TO COMMON STOCK -$0.01 PAR VALUE $3500
TO PAID IN CAPITAL IN EXCESS OF PAR-COMMON $1396500
EXPLANATION : FROM ABOVE WE CAN CONCLUDE THAT $0.01 IS PAR VALUE SO AMOUNT WILL BE CREDITED TO COMMON STOCK ACCOUNT .WHEREAS, THE EXCESS AMOUNT ABOVE PAR VALUE IS TO BE CREDITED TO PAID IN CAPITAL IN EXCESS OF PAR ACCOUNT. TOTAL AMOUNT IS RECEIVED IN CASH SO IT WILL BE DEBITED TO CASH ACCOUNT.
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