Jordan,Kyle,and Noah Have Equities in a Partnership of $100,000,$160,000,and $140,000,respectively,and

question 75

Essay

Jordan,Kyle,and Noah have equities in a partnership of $100,000,$160,000,and $140,000,respectively,and share income and losses in a ratio of 5:3:2,respectively.The partners have agreed to admit Billy to the partnership.Prepare entries in journal form without explanations to record the admission of Billy to the partnership under each of the following assumptions:
a.Billy invests $80,000 for a 25 percent interest,and a bonus is recorded for Billy.
b.Billy invests $160,000 for a one-fifth interest,and a bonus is recorded for the old partners.

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Definitions:

Direct Method

A method of preparing the cash flow statement where actual cash flow information from the company's operations is used, as opposed to indirect method adjustments.

Operating Cash Receipts

Money received by a company from its operational activities, such as sales of goods or services.

Accumulated Depreciation

The total amount of depreciation expense recorded for an asset, reducing its book value over time.

Equipment Costing

The process of tracking and analyzing the costs associated with the purchase and maintenance of equipment.