Many rural Americans entering cities had been pushed out of agricultural labor by the invention of machinery.
A mission statement defines the company vision and objectives.
A vision statement focuses more on the future goals and is usually longer than a mission statement because it covers things company purpose, goals, how it will be achieved, etc.
$410,000 goodwill should be recognized, and $270,000 is Darrow's beginning capital balance.
The implied value of the company is $900,000 ($270,000 ÷ 30%). Because the money is going to the partners rather than into the business, the capital total is $490,000 before realigning the balances. Hence, goodwill of $410,000 is recognized based on the implied value ($900,000 - $490,000). This goodwill is assumed to represent unrealized business gains and is attributed to the original partners according to their profit and loss ratio. They will then each convey 30 percent ownership of the $900,000 partnership to Darrow for a capital balance of $270,000.
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The question is incomplete. Please read below to find the missing content.
Following are the capital account balances and profit and loss percentages (indicated parenthetically) for the William, Jennings, and Bryan partnership:
William (40%) $220,000
Jennings (40%) $160,000
Bryan (20%) $110,000
Darrow invests $270,000 in cash for a 30 percent ownership interest. The money goes to the original partners. Goodwill is to be recorded. How much goodwill should be recognized, and what is Darrow's beginning capital balance?
Answer:
Change is net working capital is -$18,500(use of cash)
Explanation:
Due to the expansion inventory would increase by $4,500 ($9,500-$5,000)
Accounts receivable would also increase by $4,000 over its previous amount.
Accounts payable would reduce by $10,000 as compared to previous balance of accounts payable
The change in net working capital=$4,500+$4,000+$10,000=$18,500
This is a use of cash not a source of cash inflow
