Reference no: EM131131927
At April 30, partners' capital balances in SKG Company are: S. Seger $52,000, J. Kensington $54,000, and T. Gomez $18,000. The income sharing ratios are 5:4:1, respectively.
On May 1, the SKGA Company is formed by admitting D. Atchley to the firm as a partner.
Instructions
(a) Journalize the admission of Atchley under each of the following independent assumptions.
(1) Atchley purchases 50% of Gomez's ownership interest by paying Gomez $16,000 in cash.
(2) Atchley purchases 331⁄3% of Kensington's ownership interest by paying Kensington $15,000 in cash.
(3) Atchley invests $66,000 for a 30% ownership interest, and bonuses are given to the old partners.
(4) Atchley invests $46,000 for a 30% ownership interest, which includes a bonus to the new partner.
(b) Kensington's capital balance is $32,000 after admitting Atchley to the partnership by investment. If Kensington's ownership interest is 20% of total partnership capital, what were?
(1) Atchley's cash investment and
(2) The bonus to the new partner?
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