split cao accts evenly, specialization not asset.

Cash (total $ cont)  xx

                            partner a xx

                            partner b xx

implied val of intang. recorded

    Cash x

goodwill x

      partner a x

   partner b x

replaces stmt of ret. earnings

Cap bal @ beg

+allocation of income

- Withdrawls

= Cap bal @year end

Admission of new partner: purchase of current interest

(BV approach)

Reclassify cap. to reflect new partner acq. paid to old partners.

old a xx

old b xx

old c xx

                                  new part xx   <-- $ amnt of current int-->

1. recognize goodwill & revaluation of A/L based on val of buss implied by new partner purchase price.

goodwill xx

       old part xx

       old part xx

2. reclassify capital to reflect aquisition

old part xx

old part xx

      new part xx

cap balance for new partner = curr. cap balances + contribution x ownership %.

Cash (given) xx

              part. new xx

               part old    xx

               part old      xx

*difference between actual cash and partners implied balance = bonus, split b/t exisitng partners.

Cont. to p-ship - Goodwill to orig. partners

goodwill xx

           part cap xx

          part cap xx

goodwill= diff in new partner purch. price and actual value.

2. Cash xx

                          part cap (new) xx

     Cash xx

partner a xx

partner b xx

                   new partner xx

cash= actual cash paid, new part= how much actually worth

Cash+GW= ownership % (Cap p1+cap p2+gw)

excess Fv/Bv decreases partners cap accounts

partner leaving xx

         partner 2 xx

         partner 3 xx

                         cash xx

recognize val of asset and gw

asset xx

gw xx

             partner a xx

             partner b xx

                   patner leaving xx

partner leaving xx

                  cash xx