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businessaccountingaccounting questions and answersinstructions cody jenkins and jun ito formed a partnership to provide landscaping services. jenkins and ito shared profits and losses equally. after all the tangible assets have been adjusted to current market prices, the capital accounts of cody jenkins and jun ito have balances of $72,000 and $38,000, respectively. valeria solano has expertise with using
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Question: Instructions Cody Jenkins And Jun Ito Formed A Partnership To Provide Landscaping Services. Jenkins And Ito Shared Profits And Losses Equally. After All The Tangible Assets Have Been Adjusted To Current Market Prices, The Capital Accounts Of Cody Jenkins And Jun Ito Have Balances Of $72,000 And $38,000, Respectively. Valeria Solano Has Expertise With Using
I need help filling out the journal
The partner bonus is $12,000
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A.) Kodi Junkins and jun Ito’s Capital = 72000 + 38000 = 110000 The new value of the Partnership = 110000 + 30000 = 140000 Value of 30% Interest = 140000 30% Instructions Cody Jenkins and Jun Ito formed a partnership to provide landscaping services. Jenkins and Ito shared profits and losses equally. After all the tangible assets have been adjusted to current market prices, the capital accounts of Cody Jenkins and Jun Ito have balances of $72,000 and $38,000, respectively. Valeria Solano has expertise with using the computer to prepare landscape designs, cost estimates, and renderings. Jenkins and Ito deem these skills useful; thus, solano is admitted to the partnership at a 30% interest for a purchase price of $30,000 Required: A. Determine the recipient(s) and amount of the partner bonus. B. On December 31, provide the journal entry to a it 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?
A. The partner bonus is determined based on the capital accounts of Jenkins and Ito. Since they shared profits and losses equally, the total capital is $110,000 ($72,000 + $38,000). The bonus amount is $12,000.
B. The journal entry to admit Solano into the partnership on December 31 would be:
Partner Capital:
Solano, Capital $30,000
Cash $30,000
C. A bonus is paid in this situation as an incentive for the existing partners to admit a new partner into the partnership. It compensates them for allowing someone new to join and utilize their skills, experience, and potential contributions to the business.