1.

Instructions

a. Journalize the entry to record the division of net income for the year 2020 under
each of the following independent assumptions.

1. Net income is $30,000. Income is shared 6:3:1

2. Net income is $40,00, Niensted and Bolen are given salary allowances of
$15,000 and $10,000, respectively. The remainder is shared equally.
3. Net income is $19,000. Each partner is allowed interest of 10% on
beginning capital balances. Niensted is given a $15,000 salary allowance.
The remainder is shared equally.
b. Prepare a schedule showing the division of net income under assumption (3)
above
c. Prepare a partners' capital statement for the year under assumption (3) above.
2. At April 30, partners capital balances in PDL Company are G. Donley $52,000, C.
Lamar $48,000, and J. Pinkston $18,000. The income sharing ratios are 5:4:1
respectively. On May 1, the PDLT Company is formed by admitting J. Terrell to the firm
as a partner.

Instructions

a. Journalize the admission of Terrell under each of the following independent

assumption

1. Terrell purchases 50% of Pinkston's ownerhsip interest by paying Pinkston

$16,000 each.
2. Terrell purchases 33 1/3% of Lamar's ownership interest by paying Lamar
$15,000 in cash.
3. Terrel invests $62,000 for a 30% ownership interest, and bonuses are
given to the old partners.
4. Terrell invests $42,000 for a 30% ownership interest which includes a
bonus to the new partner.
b. Lamar's capital balance is $32,000 after admitting Terrell to the partnership by
investment. If Lamar's ownership interest is 20% of total partnership capital, what
were (1) Terrell's cash investment and (2) the bonus to the new partner?.

3.

Instructions

a. Journalize the withdrawal of Posada under each of the following assumptions.

1. Each of the continuing partners agrees to pay $18,000 in cash from

personal funds to purchase Posada"s ownership equity. Each receives
50% of Posada"s equity.
2. Emig agrees to purchase Posada"s ownership interest for $25,000 cash.
3. Posada is paid $34,000 from partnership assets, which includes a bonus
to the retiring partner.
 4. Posada is paid $22,000 from partnership assets, and bonuses to the
remaining partners are recognized.
b. If Emig"s capital balance after Posada"s withdrawal is $43,600, what were (1) the
total bonus to the remaining partners and (2) the cash paid by the partnership to
Posada?

4. For National Co., beginning capital balances on January 1, 2020, are Nancy Payne
$20,000 and Ann Dody $18,000. During the year, drawings were Payne $8,000 and
Dody $5,000. Net income was $40,000, and the partners share income equally.

Instructions

a. Prepare the partners capital statement for the year.

b. Prepare the owners equity section of the balance sheet at December 31, 2020.

5. S. Pagan and T. Tabor share income on a 6:4 basis. They have capital balances of
$100,000 and $60,000, respectively, when W. Wolford is admitted to the partnership.

Instructions

Prepare the journal entry to record the admission of W. Wolford under each of the
following assumptions. a. Investment of $90,000 cash for a 30% ownership interest with
bonuses to the existing partners.

b. Investment of $50,000 cash for a 30% ownership interest with a bonus to the new
partner