A. Determine the recipient(s)
A. Determine the recipient(s) and amount of the partnerbonus.
Recipient(s): Check all that apply.
Jun Ito
Cody Jenkins
Valeria Solano
Amount of the partner bonus: .
B)
PAGE 10
JOURNAL
| DATE | DESCRIPTION | POST.REF. | DEBIT | CREDIT | |
|---|---|---|---|---|---|
|
1 |
|||||
|
2 |
|||||
|
3 |
|||||
|
4 |
C. Why would a bonus be paid in this situation?
1.Jenkins and Ito apparently value the expertise offered bySolano.
2.Jenkins and Ito apparently want to ensure that all assets arevalued appropriately when taking on a new partner.
3.Solano apparently is willing to pay extra for the privilege ofjoining the partnership.
Cody Jenkins and Jun Ito formed a partnership to providelandscaping services. Jenkins and Ito shared profits and lossesequally. After all the tangible assets have been adjusted tocurrent market prices, the capital accounts of Cody Jenkins and JunIto have balances of $72,000 and $38,000, respectively. ValeriaSolano has expertise with using the computer to prepare landscapedesigns, cost estimates, and renderings. Jenkins and Ito deem theseskills useful; thus, Solano is admitted to the partnership at a 30%interest for a purchase price of $30,000. Required: A. Determinethe recipient(s) and amount of the partner bonus. B. On December31, provide the journal entry to admit Solano into the partnership.Refer to the Chart of Accounts for exact wording of account titles.C. Why would a bonus be paid in this situation?
Answer:
- Determine the recipient and amount of the partner bonus.Bonus received by Solano:
Cody Jenkin, Capital $ 72000Jun Ito, Capital 38000Valeria Solano’sContribution 30000Total Partners’Capital $140,000Solano’s equity Interest x 30%Salone’s, Capital $42000Salone’s Contribution 30000Bonus paid to Lane $12000(b) Provide journal entry to admit Lane into the partnership.
|
Account Title |
Debit |
Credit |
|
Cash |
30000 |
|
|
Cody Jenkin Capital |
6000 |
|
|
Jun Capital |
6000 |
|
|
Salone Capital |
42000 |
(c) Why would a bonus be paid in this situation?
2.Jenkins and Ito apparently want to ensure that all assets arevalued appropriately when taking on a new partner.
"Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!"
