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    flaccounting's Avatar
    flaccounting Posts: 1, Reputation: 1
    New Member
     
    #1

    Sep 9, 2009, 01:15 PM
    Subject is advanced accouting
    Able, Baker, and Charlie share profits and losses in a ratio of 2:3:5,

    respectively.





    Assets

    Cash $ 100,000

    Inventory 125,000

    Marketable securities 200,000

    Land 100,000

    Building-net 500,000

    Total assets $ 1,025,000



    Equities

    Able, capital $ 425,000

    Baker, capital 400,000

    Charlie, capital 200,000

    Total equities $ 1,025,000



    The partners agree to admit Delta for a one-fifth interest. The fair market value of partnership land is appraised at $200,000 and the fair market value of inventory is $175,000. The assets are to be revalued prior to the admission of Delta and there is $30,000 of goodwill that attaches to the old partnership.



    1) By how much will the capital accounts of Able, Baker, and Charlie increase, respectively, due to the revaluation of the assets and the recognition of goodwill?


    2) How much cash will Delta have to invest to acquire a one-fifth interest?



    3) What will the profit and loss sharing ratios be after Delta’s investment?
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
     
    #2

    Sep 10, 2009, 01:08 AM

    Please see the guidelines for posting homework problems:
    Ask Me Help Desk - Announcements in Forum : Homework Help

    Please show us your attempts at the problem first. If you're in advanced, you should be able to make at least a reasonable attempt at this.
    mocorlando's Avatar
    mocorlando Posts: 1, Reputation: 1
    New Member
     
    #3

    May 6, 2012, 04:29 PM
    On June 30, 2011, the Able, Baker, and Charlie partnership had the following fiscal year-end balance sheet:

    Cash $ 8,000

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