Luc, Denis, and Rollande have capital balances of $30,000, $70,000, and $15,000, respectively. The partners share profits/losses 2:6:2. All assets' book values equal market except as noted. The partnership agreement states the bonus method is to be used to account for partner sale of interest to the partnership.
Required:
Calculate Luc's new capital balance resulting from each of the following independent situations:
Situation 1:
Rollande sells his interest to the partnership for $25,000. Bonus method is used.
Situation 2:
Rollande sells his interest to Luc for $25,000.
Situation 3:
Martel purchases a 20% interest from the partnership for $35,000. The bonus method is used to account for the incoming partner.
Situation 4:
The same as Situation 3 except that the goodwill method is used to account for the incoming partner.

Question

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The Answer of Luc, Denis, and Rollande have capital balances of $30,000, $70,000, and $15,000, respectively. The partners share profits/losses 2:6:2. All assets' book values equal market except as noted. The partnership agreement states the bonus method is to be used to account for partner sale of interest to the partnership.
Required:
Calculate Luc's new capital balance resulting from each of the following independent situations:
Situation 1:
Rollande sells his interest to the partnership for $25,000. Bonus method is used.
Situation 2:
Rollande sells his interest to Luc for $25,000.
Situation 3:
Martel purchases a 20% interest from the partnership for $35,000. The bonus method is used to account for the incoming partner.
Situation 4:
The same as Situation 3 except that the goodwill method is used to account for the incoming partner.

Luc, Denis, and Rollande Have Capital Balances of $30,000, $70,000