Connie and Marcos Are Partners Who Share Profits in a Ratio

question 105

Essay

Connie and Marcos are partners who share profits in a ratio of 3:2,respectively,and have the following capital balances on September 30,20x5:
The partners agree to admit Trevor to the partnership.Calculate the capital balances of each partner after the admission of Trevor,assuming that bonuses are recorded when appropriate for each of the following assumptions:
a.Trevor pays Connie $50,000 for 50 percent of her interest
b.Trevor invests $50,000 for a one-fourth interest in the partnership
c.Trevor invests $50,000 for a 30 percent interest in the partnership
d.Trevor invests $50,000 for a 20 percent interest in the partnership

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Definitions:

Bottom Line

The final line in a financial statement that shows net income or loss.

Buying Center

A group of individuals within an organization who participate in the decision-making process for purchasing products or services.

Negotiates

The process of discussing something with someone in order to reach an agreement.

Purchaser

An individual or entity that buys goods or services.