Admission of a new partner
Exercise (1)
A&B are partners in a partnership. They share net income on a ratio 2:3. Partner C is
to be admitted to the partnership for an interest of 1/3 in capital and net income.
Before admission A and B has the following capital balances:
C is going to present Cash EGP 240,000.
Required:
Capital
Partner A
160,000
Partner B
320,000
a. Prepare the journal entry to record the admission of partner C.
b. Determine the capital balances after admission
Exercise (2)
A&B are partners in a partnership. They share net income equally. Partner C is to be
admitted to the partnership for an interest of 25% in capital and net income. Before
admission A and B has the following capital balances:
Partner A Partner B
C is going to present Cash $200,000 & Equipment
200,000
280,000
Capital
$40,000.
Required:
a. Prepare the journal entry to record the admission of partner C.
b. Determine the capital balances after admission
Exercise (3)
A&B are partners in a partnership. They share net income on a ratio 2:3. Partner C is
to be admitted to the partnership for an interest 1/4 in capital and net income. Before
admission A and B has the following capital balances:
Partner A
Partner B
C presented Cash 70,000 and land 30,000
280,000
Capital 200,000
Required:
a. Prepare the journal entry to record the admission of partner C.
b. Determine the capital balances after admission
Exercise (4)
X and Y are partners in a general partnership. They share the profit and losses on a
basis of 2:3. Their capital is 200,000 and 300,000 respectively. Z is a new partner to
be admitted to the partnership for 30% of the partner X’s capital and 20% of the
partner Y’s capital and Z paid to them 120,000 cash.
Required:
Prepare the journal entry required to record the admission of Z.