Second: Investing an asset in the partnership

(1) BONUS Method

(2) GOOD WILL Method

GOOD WILL for new partner:When the new partner contributes (invests) his sole proprietorship in the partnership with fair value more than assets present,

Good will is recorded to the new partner

EXAMPLE

Re-valuation of assets indicates that fair value of “C” net assets is $ 70,000

Partner C invests the following

Assets 80,000 A/P 20,000

Capital 60,000

80,000 80,000

THIRD: Admission of a new partner but after

revaluation of assets

Problem ONE: “EXAM 1999”

REQUIRED

Prepare journal entries to record the admission of “D” using GOOD WILL method & BONUS method.

EXERCISES & PROBLEMS ON ADMISSION

Problem TWO:

Problem THREE:

Problem FOUR:

Problem FIVE:

Problem SIX:

Problem SEVEN:

Problem EIGHT:

(GOOD WILL)

Problem ELEVEN :

Problem TWELVE:

Problem THIRTEEN:

Problem FOURTEEN:

Problem FIFTEEN:

Problem SIXTEEN:

Problem SEVENTEEN:

Problem EIGHTEEN:

Problem NINETEEN:

Problem TWENTY: