Respuesta :
Answer:
A. $222,000
B. Dr Cash $80,000
Dr Goodwill 31,000
Cr Elan, Capital $111,000
C. Dr Cash $200,000
Cr Mary, Capital $40,080
Cr Gene, Capital $20,040
Cr Pat, Capital $6,680
Cr Elan, Capital $133,200
Explanation:
A. Calculation to determine how much must Elan invest for a one-third interest
First step is to calculate the 2/3 of the total resulting capital balance of Mary, Gene, and Pat
Mary $266,400
Gene 133,200
Pat 44,400
Total $44,000
Total resulting capital balance=$444,000/2/3)
Total resulting capital balance= $444,000 / .666666
Total resulting capital balance=$ 666,000
Second step is to calculate how much must Elan invest for a one-third interest
Investment for one-third interest= $666,000 x 1/3
Investment for one-third interest=$666,000 x .333333
Investment for one-third interest=221,999.9
Investment for one-third interest=$222,000 (Approximately)
Therefore how much must Elan invest for a one-third interest is $222,000
B. Preparation of journal entry for the admission of Elan if she invests $80,000 for a 20 percent interest and goodwill is recorded.
First step is to calculate the Estimated amount of goodwill to the new partner
Estimated total capital $ 555,000
[($444,000÷(100%-20%)]
Less Total net assets (524,000)
($444,000 + $80,000)
Estimated goodwill to the new partner $31,000
($ 555,000-$524,000)
Now let prepare the journal entry
Dr Cash $80,000
Dr Goodwill 31,000
Cr Elan, Capital $111,000
[(444,,000÷(100%-20%)*20%)]
=($444,000/80%*20%)
=$111,000
C. Preparation of journal entry for the admission of Elan if she invests $200,000 for a 20 percent interest while the Total capital will be $600,000.
First step
Amount Invested in partnership $ 20,000
Less New partner's book value ($133,200)
[($444,000 + $222,000) x .20]
Difference $66,800
($200,000-$133,200)
Now let prepare the journal entry using ratio 6:3:1
Dr Cash $200,000
Cr Mary, Capital $40,080
($66,800 x .60)
Cr Gene, Capital $20,040
($66,800 x .30)
Cr Pat, Capital $6,680
($66,800 x .10)
Cr Elan, Capital $133,200
($666,000 x .20)
Journal entry si the initial recording of the monetary business transactions in the books of accounts. They are recorded in the chronological order. Each business transaction as dual effects in the books of accounts, that is it debits one account and credits another from a single business transaction.
(A) The Elan's Investment for one third interest.
[tex]\bold { = 666,000\times \dfrac {1} {3}}\\\\\bold { = 222,000 }[/tex]
(B) The journal entry for the admission of Elan if she invests $80,000 for a 20% interest and goodwill is recorded.
Estimated total capital $ 555,000
[tex]\bold {= \dfrac {444,000}{(100-20)}}[/tex]
Less Total net assets (524,000)
($444,000 + $80,000)
Estimated goodwill to the new partner $31,000
($ 555,000-$524,000)
Now the Journal entry,
Dr Cash- $80,000
Dr Goodwill- 31,000
Cr Elan, Capital- $111,000
[tex]\bold {\dfrac {(444,000}{(100-20)}\times 20)}\\\\\bold {=111,000}[/tex]
(C) The journal entry for the admission of Elan if she invests $200,000 for a 20%.
Amount Invested in partnership $ 20,000
Less New partner's book value ($133,200)
[tex][(\bold {444,000 + 222,000) \times 20 }[/tex]
Difference- $66,800
($200,000-$133,200)
The Journal entry, in the ratio 6:3:1
Dr Cash - $200,000
Cr Mary, Capital- $40,080
[tex]\bold {(66,800 \times 60)}[/tex]
Cr Gene, Capital- $20,040
[tex]\bold{(66,800 \times 30)}[/tex]
Cr Pat, Capital- $6,680
[tex]\bold {(66,800 \times 10)}[/tex]
Cr Elan, Capital- $133,200
[tex]\bold {(666,000 \times 20)}[/tex]
Therefore, Journal entry is the intial recording of the monetary business transactions in the books of accounts. They are reocrded in the chronological order. Each business transaction as dual effects in the books of accounts, that is it debits one account and credits another from a single business transaction.
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