【正文】 Results when new partner’s investment in the firm is greater than the capital credit on the date of admittance ? Example – Boyd and Chan with total capital of $120 000 agree to admit Dante to the partnership – Dante acquires a 25% ownership interest by making a cash investment of $80 000 – Current profit sharing ratio is Boyd 60% and Chan 40% PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 33 Investment of assets in a partnership continued ? Steps in determining bonus 1 Determine the total capital of the new partnership ? New partner’s investment + capital of the old partnership ? $120 000 + $80 000 = $200 000 2 Determine the new partner’s capital credit ? Multiply the total capital of the new partnership by the new partner’s ownership interest ? $200 000 x 25% = $50 000 PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 34 Investment of assets in a partnership continued 3 Determine the amount of bonus ? Subtract the new partner’s capital credit from the new partner’s investment ? $80 000 $50 000 = $30 000 4 Allocate the bonus to the old partners on the basis of their ine ratios ? Boyd: $30 000 x 60% = $18 000 ? Chan: $30 000 x 40% = $12 000 PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 35 Investment of assets in a partnership continued – Entry to record admission of Dante PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 36 Cash 80 000 S. Boyd, Capital 18 000 T. Chan, Capital 12 000 L. Dante, Capital 50 000 (To record admission of Dante and bonus to old partners) Investment of assets in a partnership continued Bonus to new partner ? Results when the new partner’s investment is less than his or her capital credit in the firm ? Capital balances of the old partners are decreased based on their ine ratios before the admission of the new partner PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 37 Investment of assets in a partnership continued ? Example – Dante invests $20 000 cash for 25% ownership – Calculation of bonus by 4 steps PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 38 1. Total capital of BoydChan partnership $120 000 Investment by new partner, Dante 20 000 Total capital of new partnership $140 000 2. Dante’s capital credit (25% x $140 000) $ 35 000 3. Bonus to Dante ($35 000 $20 000) $ 15 000 4. Allocation of bonus to old partners: Boyd ($15 000 x 60%) $9000 Chan ($15 000 x 40%) $6000 $ 15 000 Investment of assets in a partnership continued – Entry to record admission of Dante PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 39 Cash 20 000 S. Boyd, Capital 9 000 T. Chan, Capital 6 000 L. Dante, Capital 35 000 (To record admission of Dante and bonus) WITHDRAWAL OF A PARTNER ? A partner may withdraw … – Voluntarily selling his or her equity – Involuntarily by reaching mandatory retirement age or by dying ? Withdrawal of a partner may be acplished by – Payment from remaining partners’ personal assets, or – Payment from partnership assets PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 40 LO6 WITHDRAWAL OF A PARTNER continued PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 41 Payment for partners’ personal assets ? The withdrawal of a partner when payment made from partners’ personal assets is the direct opposite of admitting a new partner who purchases a partner’s interest ? It is a personal transaction between the partners PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 42 Payment for partners’ personal assets continued ? Example – Marshall, Nguyen and Opal have capital balances of $25 000, $15 000 and $10 000, respectively – Marshall and Nguyen agree to buy out Opal’s interest – Each of them agrees to pay Opal $8000 in exchange for onehalf of Opal’s total interest of $10 000 PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 43 Payment for partners’ personal assets continued – Entry to record the withdrawal PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 44 J. Opal, Capital 10 000 A. Marshall, Capital 5 000 M. Nguyen, Capital 5 000 (To record purchase of Opal’s interest) Payment for partners’ personal assets continued – Ledger balances after payment from partners’ personal assets PowerPoint presentation by Dr Anne Abraham, University of Western Sydney 45 Net Assets 50 000 M. Nguyen, Capital 15 000 5 000 Bal. 20 000 J. Opal, Capital 10 000 10 000 Bal. 0 A. Marshall, Capital 25 000 5 000 Bal. 30 000 Payment from partnership assets ? Using partnership assets to pay for a withdrawing partner’s interest decreases both total assets and total partnership capital ? In accounting for a withdrawal by payment from partnership assets: – Asset revaluations should be recorded, and – Any difference between the amount paid and the withdrawing partner’s capital balance should be considered a bonus to the retiring partner or a bonus to the remain