Paul and Ray Sell Musical Instruments Through Their Partnership

question 30

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 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b)Paul and Ray agree that some of the inventory is obsolete.The inventory account is decreased before Janet is admitted.Janet invests $190,000 for a one-fourth interest.

---

Definitions:

Executive Summary

A concise overview of a document or report's key points, designed to provide readers with a quick and easy understanding of its main content.

Letter of Transmittal

A formal document accompanying a report or proposal that provides an overview and specifies the document's purpose.

Prefatory Parts

Introductory sections of a book or document that precede the main text, often including the title page, table of contents, and foreword.

Letter Reports

A type of document typically used in business and professional settings to communicate information, findings, or recommendations in a letter format.