Tribbs invested $45,000 and is a limited partner. Tribbs receives interest at 6% on its investment.
Ruth provides $35,000 in computer equipment as a limited partner.
Bob provides $15,000 as the general partner and receives a salary of $15,000 per year.
Profits during the year are $60,000 after all expenses.
At the end of the year, Ruth retires from the partnership. The partnership pays her $50,000. Profit allocation is 45% for Tribbs, 30% for Ruth, and 25% for Bob.
After Ruth retires, the partnership admits Paul who invests $50,000 and will receive 30% of the partnership’s gains and losses.
In your group, create a report with the relevant spreadsheets including the accounting documentation behind the new partnership.
Make the journal entries to record the initial investment.
Using a worksheet, allocate profits at the year-end.
Make the journal entries to record Ruth’s retirement pay.
Using a worksheet, calculate the partners’ balances after Ruth’s retirement and make the necessary journal entries for the partnership books.
Using a worksheet, calculate the partners’ balances once Paul is admitted and make the journal entries to update the books.
Show the journal entries for the revaluation method, goodwill method, and bonus method.<.ul>
Please add your file.
Provide 2–3 paragraphs as to the best method to journalize Paul’s admission into the partnership.
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