Question

Tamer and Maher are partners with capital balances of $60,000. They share profits and losses at...

Tamer and Maher are partners with capital balances of $60,000. They share profits and losses at 50% each. Zaher contributes $24,000 to the partnership for a 1/3 share. What amount should the partnership record as an individual bonus to each of the old partners?
Select one:
a. $10,000
b. $20,000
c. $3,500
d. $7,000
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer : All the 4 Options given in the question are wrong. Kindly see below for calculations and correct answer please. Let me know in comment section there is still any doubt.

See calculations below :

Total Capital of Tamer and Maher = $60,000

Investment by new partner, Zaher = $24,000

Total Capital of new partnership = $84,000

Zaher Capital Credit(1/3 share) = 1/3*84,000 = 28,000

Total bonus to Zaher = $28,000- $ 24,000 = $4,000

To allocate the $4,000 bonus that each of the old partners will contribute to the new partner, Zaher make the following calculations.

Tamer:($4,000×50%) = $2,000

Meher:($4,000×50%) = $2,000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
the partnership of tasha and bill shares profits and losses in a 50:50 ratio, and the...
the partnership of tasha and bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60.000 investment. The partner's new agreement will share profit and loss in a 1:3 ratio
Exercise 12-15 Foss, Albertson, and Espinosa are partners who share profits and losses 50%, 30%, and...
Exercise 12-15 Foss, Albertson, and Espinosa are partners who share profits and losses 50%, 30%, and 20%, respectively. Their capital balances are $117,000, $55,000, and $32,000, respectively. Assume Garrett joins the partnership by investing $81,600 for a 25% interest with bonuses to the existing partners. Prepare the journal entry to record his investment. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
P, R, and D have the following capital balances; $80,000, $100,000 and $60,000, respectively. The partners...
P, R, and D have the following capital balances; $80,000, $100,000 and $60,000, respectively. The partners share profits and losses 20%, 40%, and 40%, respectively. Required (show all your calculations): 3. What is the total partnership capital after R retires receiving $160,000 and using the goodwill method (assume all capital accounts are revalued)? (3.5 points) 4. R retires and is paid $160,000 based on an independent appraisal of the business. If the bonus method is used, what is the capital...
Joumana and Hala share profits and losses in a ratio of 5:3 respectively. Joumana and Hala...
Joumana and Hala share profits and losses in a ratio of 5:3 respectively. Joumana and Hala receive salary allowances of $10,000 and $20,000 respectively, and both partners receive 5% interest based upon the balance in their capital accounts on January 1. Partners’ drawings are not used in determining the average capital balances. Total net income for 2019 is $80,000. If net income after deducting the interest and salary allocations is greater than $20,000, Hala receives a bonus of 7% of...
Jim and Joe are partners agreeing to share profits and losses in a​ 2:6 ratio, respectively....
Jim and Joe are partners agreeing to share profits and losses in a​ 2:6 ratio, respectively. Business has been profitable and they have decided to admit Jewel to the partnership for a cash investment. The balances in Jim and​ Joe's capital accounts are presently $ 240000 and $ 260000​, respectively. If Jewel is given a​ 25% interest in the partnership in exchange for $ 200000​, the entry to record her investment includes a​ _______. A.credit to​ Jewel, Capital for$200,000 B.debit...
Joumana and Hala share profits and losses in a ratio of 5:3 respectively. Joumana and Hala...
Joumana and Hala share profits and losses in a ratio of 5:3 respectively. Joumana and Hala receive salary allowances of $10,000 and $20,000 respectively, and both partners receive 5% interest based upon the balance in their capital accounts on January 1. Partners’ drawings are not used in determining the average capital balances. Total net income for 2019 is $80,000. If net income after deducting the interest and salary allocations is greater than $20,000, Hala receives a bonus of 7% of...
Bell and Carson are partners who share profits and losses 3:7. The capital accounts on January...
Bell and Carson are partners who share profits and losses 3:7. The capital accounts on January 1, 2011, are $120,000 and $160,000, respectively. Elston is to be admitted as a partner with a one- fourth interest in the capital and profits and losses by investing $80,000. Goodwill is not to be recorded. The capital balances after admission should be: (Please show work) a. Bell, $117,000; Carson, $153,000; Elston, $90,000 b. Bell, $120,000; Carson, $160,000; Elston, $90,000 c. Bell, $123,000; Carson,...
Following is the current balance sheet for a local partnership of doctors: Cash and current assets...
Following is the current balance sheet for a local partnership of doctors: Cash and current assets . . . . . . . . . . . . . . . . . . . . . $ 30,000 Land . . . . . . . . . . . . . . . . . . . . . . . 180,000 Building and equipment   (net) . . . . . . . . . . . ....
Partnership income allocation—Bonus Arn, Bev, and Car are partners who share profits and losses 30:30:40, respectively,...
Partnership income allocation—Bonus Arn, Bev, and Car are partners who share profits and losses 30:30:40, respectively, after Bev, who manages the partner- ship, receives a bonus of 10 percent of income, net of the bonus. Partnership income for the year is $198,000 Required: Prepare a schedule to allocate partnership income to Arn, Bev, and Car.
ABC Company has three partners whose capital balances at the beginning of the year are :...
ABC Company has three partners whose capital balances at the beginning of the year are : Anna $200,000; Barbara $60,000; Clint $140,000. Partners agree to divide income and loss as follows: a. Salary allowance of $40,000 to Anna, $30,000 to Barbara, and $20,000 to Clint; b. Interest allowance of 10% on beginning-of-year capital balances; and c. Any remaining balance to be divided equally. Partnership net income is $160,000. The amount of partnership net income to be allocated to each partner...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT