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Hoochie [10]
3 years ago
8

D. Shahi and K. Vaughn organize a partnership. Their partnership agreement states that Shahi will receive 40% of the partnership

income or loss and Vaughn will receive the remaining 60%. On January 2, the two partners agree to accept Paul Williams as a partner with a 40% interest if Williams invests $80,000 cash. At the time of Williams' admission, the partnership`s accounting records show that Shahi has recorded equity of $80,000 and Vaughn has recorded equity of $90,000. The old partners will contribute to the bonus paid to Williams as follows
$12,000 by Shahi and $8,000 by Vaughn.

$32,000 by Shahi and $48,000 by Vaughn.

$8,000 by Shahi and $12,000 by Vaughn.

$32,000 by Shahi and $63,000 by Vaughn.
Business
1 answer:
Softa [21]3 years ago
6 0

Answer:

$8,000 by Shahi and $12,000 by Vaughn.

Explanation:

Given that,

Investment of Shahi = $80,000 with 40% share

Investment of Vaughn = $90,000 with 60% share

Investment of Williams = $80,000 with 40% interest

Total capital after admission of Paul Williams:

= Investment of Williams + Investment of Shahi + Investment of Vaughn

= $80,000 + $80,000 + $90,000

= $250,000

Williams's share in new capital:

= Total capital after admission of Paul Williams × Interest

= $250,000 × 40%

= $100,000

Bonus paid to Williams:

= Williams's share in new capital - Investment of Williams

= $100,000 - $80,000

= $20,000

Therefore, the bonus paid to Williams will be contributed by old partners:

D. Shahi Contributed = $20,000 × 40%

                                      = $8,000

K. Vaughn contributed = $20,000 × 60%

                                      = $12,000

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Garcia Co. owns equipment that cost $81,600, with accumulated depreciation of $43,200. Garcia sells the equipment for cash. Reco
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Answer:

1. Cash                                                          Debit    $ 47,000

 Accumulated Depreciation equipment   Debit  $ 40,800

 Gain on sale of equipment                       Credit                       $  11,000

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To record sale of equipment for $ 47,000 and gain on sale of $ 11,000

2. Cash                                                          Debit    $ 36,000

  Accumulated Depreciation equipment   Debit   $ 40,800

  Equipment                                                 Credit                          $ 76,800

To record sale of equipment for $ 36,000

3.  Cash                                                          Debit    $ 31,000

  Accumulated Depreciation equipment   Debit    $ 40,800

  Loss on sale of equipment                       Debit    $   5,000

  Equipment                                                  Credit                          $ 76,800                        

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Less: Accumulated depreciation                                                     $ 40,800

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In first step where the equipment is sold of $ 47,000, the differential between the sale value and the net book value is the gain on sale and is credited in the accounting entry.

In the second step, where the equipment is sold for $ 36,000, the sale proceeds is exactly equal to the net book value and no gain or loss is recorded.

In the third step, the equipment is sold for $ 31,000 and the differential  between the net book value and the sale proceeds is a loss and recorded as a debit in the accounting entry

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