Paul and Ray Sell Musical Instruments Through Their Partnership

question 59

Essay

Paul and Ray sell musical instruments through their partnership.To bring in additional funds and expertise,they decide to admit Janet to the partnership.Paul's capital is $400,000,Ray's capital is $200,000,and they share income in a ratio of 7:3,respectively.
Required
Record Janet's admission and the recording of goodwill or inventory write-down,as indicated,for each of the following independent situations:
a)Janet invests $180,000 for a one-fourth interest.Goodwill is to be recorded.
b)Paul and Ray agree that some of the inventory is obsolete.The inventory account is decreased before Janet is admitted.Janet invests $190,000 for a one-fourth interest.
Problem 75 (continued):

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Definitions:

Exporting

The commercial activity of selling products or services made in one nation to purchasers in a different country.

Political Risk Ratings

Evaluations designed to assess the likelihood of political decisions, events, or conditions impacting business operations and investment value.

Global Marketing Locations

Geographical areas around the world where companies promote and sell their products or services.

Currency Exchange Rate

The rate at which one currency can be exchanged for another, often determined by national economies and global market conditions.