The Distance Plus partnership has the following capital balances at the beginning of the current year: Tiger (40% of profits and losses) $ 150,000 Phil (30%) 120,000 Ernie (30%) 135,000 Each of the following questions should be viewed independently.
Required:
a. If Sergio invests $190,000 in cash in the business for a 20 percent interest, what journal entry is recorded?
b. If Sergio invests $100,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the bonus method is used.
c. If Sergio invests $102,000 in cash in the business for a 20 percent interest, what journal entry is recorded? Assume that the goodwill is used.
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The Distance Plus partnership has the following capital balances at the beginning of the current yea...
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