Answer:
Explanation:
The journal entries and the computations are shown below:
a. Henry's Capital A/c Dr $32,000
Chou's Capital A/c Dr $25,000
To Gilbert's Capital A/c $57,000
(Being the admission of Gilbert is recorded)
The calculation would be
For Trent Henry
= Capital balance × interest buyed
= $160,000 × 1 ÷ 5
= $32,000
For Tim Chou
= Capital balance × interest buyed
= $100,000 × 1 ÷ 4
= $25,000
b. Cash A/c Dr $90,000
To Clarke's Capital A/c $90,000
(Being the contributed amount is recorded)
c. Capital balances would be
Particulars Henry Chou Gilbert Clarke
Capital before admission $160,000 $100,000
Amount after Admission -$32,000 -$25,000 $57,000 $90,000
New Capital balances $128,000 $75,000 $57,000 ,$90,000
