Bellows has a capital balance of $200,000 after adjusting assets to fair market value. Rodriguez contributes $360,000

Bellows has a capital balance of $200,000 after adjusting assets to fair market value. Rodriguez contributes $360,000 to receive a 60% interest in a new partnership with Bellows.

Determine the amount and recipient of the partner bonus.


Answer:











Equity of Bellows…………………………………………………………………… $200,000
Rodriguez’s contribution………………………………………………………… 360,000
Total equity after admitting Rodriguez………………………………………… $560,000
Rodriguez’s equity interest……………………………………………………… × 60%
Rodriguez’s equity after admission……………………………………………… $336,000
Rodriguez’s contribution………………………………………………………… $360,000
Rodriguez’s equity after admission…………………………………………… 336,000
Bonus paid to Bellows…………………………………………………………… $ 24,000



Hiro has a capital balance of $75,000 after adjusting assets to fair market value. Marone contributes $25,000 to receive a 40% interest in a new partnership with Hiro.

Determine the amount and recipient of the partner bonus.


Answer:

Equity of Hiro……………………………………………………………………… $ 75,000
Marone’s contribution……………………………………………………………… 25,000
Total equity after admitting Marone……………………………………………… $100,000
Marone’s equity interest………………………………………………………...… × 40%
Marone’s equity after admission………………………………………………… $ 40,000
Marone’s contribution……………………………………………………………… 25,000
Bonus paid to Marone……………………………………………………………… $ 15,000