The capital accounts of Susan Yu and Ben Hardy have balances of $100,000 and $90
ID: 2518422 • Letter: T
Question
The capital accounts of Susan Yu and Ben Hardy have balances of $100,000 and $900,000 respectively. Ken Mahl and Jeff Wood are to be admitted to the partnership. Mahl buys one- fourth of Yu's interest for $27,500 and one-fifth of Hardy's interest for $20,000. Wood contributes $35,000 cash to the partnership, for which he is to receive an ownership equity of $35,000. a. Journalize the entries to record admission of (I) Mahl and (2) Wood b. What are the capital balances of each partner after the admission of the new partners?Explanation / Answer
EXPLANATION TO QUESTION 1
a. JOURNAL ENTRIES
(1) Susan Yu, Capital.......................................................... 27,500
Ben Hardy, Capital......................................................... 20,000
Ken Mahl.................................................................... 47,500
(2) Cash.................................................................................. 35,000
Jeff Wood, Capital.................................................... 35,000
b. CAPITAL BALANCES
Susan Yu................................................................................ 72,500
Ben Hardy.............................................................................. 52,000
Ken Mahl................................................................................ 47,500
Jeff Wood............................................................................... 35,000
EXPLANATION TO QUESTION 2
a. JOURNAL ENTRIES
Cash........................................................................................ 45,000
Cecil Jacobs, Capital.......................................................... 5,000
Maria Estaban, Capital........................................................ 5,000
Lee White, Capital............................................................ 55,000
b. CAPITAL BALANCES
Cecil Jacobs.......................................................................... 56,000
Maria Estaban....................................................................... 54,000
Lee White 55,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.