Oak, Pine, and Maple are partners with present capital balances of $42,000, $39,000, and $90,000, respectively. The partners share profits and losses according to the following percentages: 20% for Oak, 20% for Pine, and 60% for Maple. The existing assets of the original partnership have market values equal to book values except for the following:
Pine has agreed to sell her interest to the partnership for $45,000.
Required:
Calculate the capital balances for each individual in the new partnership, assuming use of the bonus and goodwill methods. The goodwill method should recognize the goodwill traceable to all partners.

Question

Oak, Pine, and Maple are partners with present capital balances of $42,000, $39,000, and $90,000, respectively. The partners share profits and losses according to the following percentages: 20% for Oak, 20% for Pine, and 60% for Maple. The existing assets of the original partnership have market values equal to book values except for the following:  
Pine has agreed to sell her interest to the partnership for $45,000.
Required:
Calculate the capital balances for each individual in the new partnership, assuming use of the bonus and goodwill methods. The goodwill method should recognize the goodwill traceable to all partners.

Quizplus · Accepted Answer

The Answer of Oak, Pine, and Maple are partners with present capital balances of $42,000, $39,000, and $90,000, respectively. The partners share profits and losses according to the following percentages: 20% for Oak, 20% for Pine, and 60% for Maple. The existing assets of the original partnership have market values equal to book values except for the following:  
Pine has agreed to sell her interest to the partnership for $45,000.
Required:
Calculate the capital balances for each individual in the new partnership, assuming use of the bonus and goodwill methods. The goodwill method should recognize the goodwill traceable to all partners.

Oak, Pine, and Maple Are Partners with Present Capital Balances