Question

# The E.N.D. partnership has the following capital balances as of the end of the current year:...

The E.N.D. partnership has the following capital balances as of the end of the current year:

 Pineda \$ 290,000 Adams 250,000 Fergie 220,000 Gomez 200,000 Total capital \$ 960,000

Answer each of the following independent questions:

Assume that the partners share profits and losses 3:3:2:2, respectively. Fergie retires and is paid \$253,000 based on the terms of the original partnership agreement. If the goodwill method is used, what is the capital balance of the remaining three partners?

Assume that the partners share profits and losses 4:3:2:1, respectively. Pineda retires and is paid \$325,000 based on the terms of the original partnership agreement. If the bonus method is used, what is the capital balance of the remaining three partners? (Do not round your intermediate calculations. Round your final answers to the nearest dollar amounts.)

 A. If the goodwill method is used, what is the capital balance of the remaining three partners? goodwill (253000-220000)/0.2) 165000 Goodwill old capital new capital paid net new capital Pineda 49500 290000 339500 339500 Adams 49500 250000 299500 299500 Fregie 33000 220000 253000 -253000 0 Gomez 33000 200000 233000 233000 165000 960000 B. If the bonus method is used, what is the capital balance of the remaining three partners? bonus (325000-290000) 35000 bonus(allocated in profit ratio) old capital new capital net new capital Pineda 35000 290000 -325000 0 Adams -17500 250000 232500 232500 Fregie -11666.67 220000 208333.3 208333 Gomez -5833.33 200000 194166.7 194167