A summary balance sheet for the partnership of Quail,Rainne and Selma on December 31,2014 is shown below.Partners Quail,Rainne and Selma allocate profit and loss in their respective ratios of 6:3:1.
The partners agree to admit Trask for a one-tenth interest.The fair market value for partnership land is $260,000,and the fair market value of the inventory is $370,000.
Required:
1.Record the entry to revalue the partnership assets prior to the admission of Trask.
2.Calculate how much Trask will have to invest to acquire a 10% interest.
3.Assume the partnership assets are not revalued.If Trask paid $300,000 to the partnership in exchange for a 10% interest,what would be the bonus that is allocated to each partner's capital account?

Question

A summary balance sheet for the partnership of Quail,Rainne and Selma on December 31,2014 is shown below.Partners Quail,Rainne and Selma allocate profit and loss in their respective ratios of 6:3:1.  
The partners agree to admit Trask for a one-tenth interest.The fair market value for partnership land is $260,000,and the fair market value of the inventory is $370,000.
Required:
1.Record the entry to revalue the partnership assets prior to the admission of Trask.
2.Calculate how much Trask will have to invest to acquire a 10% interest.
3.Assume the partnership assets are not revalued.If Trask paid $300,000 to the partnership in exchange for a 10% interest,what would be the bonus that is allocated to each partner's capital account?

Quizplus · Accepted Answer

The Answer of A summary balance sheet for the partnership of Quail,Rainne and Selma on December 31,2014 is shown below.Partners Quail,Rainne and Selma allocate profit and loss in their respective ratios of 6:3:1.  
The partners agree to admit Trask for a one-tenth interest.The fair market value for partnership land is $260,000,and the fair market value of the inventory is $370,000.
Required:
1.Record the entry to revalue the partnership assets prior to the admission of Trask.
2.Calculate how much Trask will have to invest to acquire a 10% interest.
3.Assume the partnership assets are not revalued.If Trask paid $300,000 to the partnership in exchange for a 10% interest,what would be the bonus that is allocated to each partner's capital account?

A Summary Balance Sheet for the Partnership of Quail,Rainne and Selma