Pell company of Demers company The capital account balances for Donald & Hanes L

Question

Pell company of Demers company The capital account balances for Donald & Hanes LLP on January 1, 2013, wer a Donald, capita $200,000 100,000 Hanes, capital Donald and Hanes shared net income and losses in the ratio of 60% to to admit May to the partnershi 40%. The partners agreed p with a 35% interest in partnership capital and net income. May invested $100,000 cash, the bonus method is used. 1). What is the balance 1). What is the balance A. $84,000. B. $100,000. C. $140,000. D. $176,000 E $200,000. of May's capital account after the new partnership is created? cap 2). W A. $84,000. B. $100,000. C. $140,000 D. $176,000. E. $200,000. hat is the balance of Donald's capital account after the new partnership is created? 3). What is the balance of Hanes's capital account after the new partnership is created? A. $84,000. B. S100,000. C. $140,000 D. $176,000. E. $200,000. 4). What is the new total balance of the partnership accounts? A. $84,000. B. $140,000. C. $176,000 D. $200,000 E. $400,000 5). If the goodwill method is used, May is bringing in about how much goodwill? A. $84,530. B. $46,350. C. $61,540. D. S75,730 E. $23,750.

Explanation / Answer

Solution:-

1. C. $140,000

Explanation:- Donald $200,000 + Hanes $100,000 + Cash $100,000 = $400,000 × .35 = $140,000 to May.

2. D. $ 176,000

Explanation:- Donald $200,000 + Hanes $100,000 + Cash $100,000 = $400,000 × .35 = $140,000 to May

3. A. $ 84,000

Explanation:-Bonus to May $40,000 × .40 = $16,000 from Hanes' $100,000 = $84,000 New Capital Balance

4. $ 400,000

Explanation:- Donald $176,000 + Hanes $84,000 + May $140,000 = Total Partners Capital $400,000

Note:- As per chegg guidelines if more than four part is posted than we liable to answer only first four parts.

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