Usman and Ahmad, partners in a consulting business, share profits and losses equally. Prior to recording the admission o
Posted: Tue Nov 16, 2021 9:08 am
Usman and Ahmad, partners in a consulting business, share
profits and losses equally. Prior to recording the admission of Ali
as a new partner, Usman has a capital balance of $40,000, and Ahmad
has a capital balance of $30,000.
Required: For each of the following independent
cases, prepare the journal entry that was made to record the
admission of Ali into the partnership
a. Ali is admitted to the partnership with a cash investment of
$45,000.
b. Ali purchased a one-quarter interest for $45,000.
c. Usman and Ahmad agreed to give Ali a two-fifths in the new
partnership for $45,000.
d. Usman and Ahmad are not willing to have their capital
accounts reduced, but they are willing to allow Ali a two-fifths
interest in the firm for his investment to $45,000.
NOTE : I NEED EXPLANATIONS PLEASE
profits and losses equally. Prior to recording the admission of Ali
as a new partner, Usman has a capital balance of $40,000, and Ahmad
has a capital balance of $30,000.
Required: For each of the following independent
cases, prepare the journal entry that was made to record the
admission of Ali into the partnership
a. Ali is admitted to the partnership with a cash investment of
$45,000.
b. Ali purchased a one-quarter interest for $45,000.
c. Usman and Ahmad agreed to give Ali a two-fifths in the new
partnership for $45,000.
d. Usman and Ahmad are not willing to have their capital
accounts reduced, but they are willing to allow Ali a two-fifths
interest in the firm for his investment to $45,000.
NOTE : I NEED EXPLANATIONS PLEASE