# Partnership Formation, Income Allocation, and Admission of New Partner Below are the requested journal entries and capital calculations, based on the details provided. --- ## Partner Details | Partner | Contribution (Cash) | Contribution (Land) | Contribution (Building) | Total Capital | |-----------|---------------------|---------------------|------------------------|--------------| | Comeau | $309,900 | | | $309,900 | | Lavoie | $186,000 | $142,100 | $159,600 | $487,700 | --- ## 1. Journal Entries ### a) April 1, 2022 — Formation of Partnership ```markdown **Journal Entry:** | Account | Debit | Credit | |----------------------|------------|------------| | Cash | 495,900 | | | Land | 142,100 | | | Building | 159,600 | | | Comeau, Capital | | 309,900 | | Lavoie, Capital | | 487,700 | *To record initial investments by Comeau and Lavoie.* ``` --- ### b) March 20, 2023 — Partner Withdrawals Assume both withdrawals are by cash. ```markdown **Journal Entry:** | Account | Debit | Credit | |----------------------|------------|------------| | Comeau, Drawing | 120,400 | | | Cash | | 120,400 | *To record cash withdrawal by Comeau.* ``` --- ### c) March 31, 2023 — Allocate Net Income #### Step 1: Salary Allowance - Comeau: 5% of $309,900 = **$15,495** - Lavoie: 5% of $487,700 = **$24,385** - **Total Salary Allowance:** $39,880 #### Step 2: Remaining Profit - Net Income: $616,000 - Less Salary Allowance: $616,000 - $39,880 = **$576,120** - Comeau: 40% of $576,120 = **$230,448** - Lavoie: 60% of $576,120 = **$345,672** #### Step 3: Total Profit Allocation - Comeau: $15,495 + $230,448 = **$245,943** - Lavoie: $24,385 + $345,672 = **$370,057** ```markdown **Journal Entry:** | Account | Debit | Credit | |----------------------|------------|------------| | Income Summary | 616,000 | | | Comeau, Capital | | 245,943 | | Lavoie, Capital | | 370,057 | *To allocate net income to partners according to agreement.* ``` --- ### d) April 1, 2023 — Admission of Travis Roberts #### Step 1: Calculate Total Equity After Profit/Withdrawal - Comeau: $309,900 (initial) + $245,943 (income) - $120,400 (withdrawal) = **$435,443** - Lavoie: $487,700 (initial) + $370,057 (income) = **$857,757** - **Total equity before Roberts:** $1,293,200 #### Step 2: Roberts Invests for 20% Equity - Roberts pays: $144,900 - After investment, total equity = $1,293,200 + $144,900 = **$1,438,100** - Roberts' share: $1,438,100 × 20% = **$287,620** - Bonus to existing partners = $287,620 - $144,900 = **$142,720** ##### Allocate Bonus Based on Capital Balances: - Comeau's share of bonus: $435,443 / $1,293,200 ≈ 33.67% - $142,720 × 33.67% ≈ **$48,085** - Lavoie's share: $857,757 / $1,293,200 ≈ 66.33% - $142,720 × 66.33% ≈ **$94,635** ##### Adjusted Capital Accounts Pre-Journal: - Comeau: $435,443 + $48,085 = **$483,528** - Lavoie: $857,757 + $94,635 = **$952,392** - Roberts: $144,900 (investment) + $142,720 (bonus) = **$287,620** ```markdown **Journal Entry:** | Account | Debit | Credit | |----------------------|------------|------------| | Cash | 144,900 | | | Comeau, Capital | | 48,085 | | Lavoie, Capital | | 94,635 | | Roberts, Capital | | 144,900 | *To record Roberts' admission and reallocation of capital to reflect 20% equity interest.* ``` --- ## 2. Capital Balances After April 1, 2023 | Partner | Capital | |-----------|------------------------| | Comeau | $483,528 | | Lavoie | $952,392 | | Roberts | $287,620 | - **Total Partnership Equity:** $1,723,540 --- ## Summary Table | Date | Event | Comeau | Lavoie | Roberts | Total | |--------------|----------------------------------------|-----------|-----------|-----------|------------| | Apr 1, 2022 | Initial Investment | 309,900 | 487,700 | | 797,600 | | Mar 20, 2023 | Withdrawal | (120,400) | | | (120,400) | | Mar 31, 2023 | Net Income Allocation | +245,943 | +370,057 | | +616,000 | | Apr 1, 2023 | Roberts Admission (cash + bonus) | +48,085 | +94,635 | +287,620 | +430,340 | | **Final** | **Capital Accounts** | 483,528 | 952,392 | 287,620 | 1,723,540 | --- ## Notes - This answer assumes all income is allocated at March 31, 2023, and that the withdrawal was by Comeau only, as per the data provided. - All calculations are rounded to the nearest dollar. - If further details on withdrawals or partnership agreement are provided, adjust accordingly. --- **If you need the entries in a different format or more breakdown, please clarify.**

# Summary of Steps ## 1. Journal Entries ### a) April 1, 2022 — Formation of Partnership The partnership was formed with Comeau and Lavoie making cash and asset contributions. The total capital accounts for both partners were recorded based on their investments. ### b) March 20, 2023 — Partner Withdrawals Comeau withdrew $120,400 in cash from the partnership. This withdrawal reduced his capital account balance for the year. ### c) March 31, 2023 — Allocate Net Income Net income of $616,000 was allocated between the partners after deducting salary allowances. Comeau received a total of $245,943, while Lavoie received $370,057 for the year. ### d) April 1, 2023 — Admission of Travis Roberts Travis Roberts was admitted to the partnership with an investment of $144,900 for a 20% equity interest. His admission required recalculating existing partners' capital balances and distributing a bonus based on their equity stakes. ## 2. Capital Balances After April 1, 2023 Following all transactions, the final capital balances were as follows: Comeau with $483,528, Lavoie with $952,392, and Roberts with $287,620. The total partnership equity after these adjustments amounted to $1,723,540.

# Capital Account Calculations ## 2. Calculation of Capital Balances After April 1, 2023 ### Step 1: Initial Capital Balances (Post-Withdrawal) 1. **Comeau's Balance Before Admission**: - Initial Contribution: $309,900 - Plus Net Income Allocation: $245,943 - Less Withdrawal: $120,400 - **Total Comeau's Capital**: \[ 309,900 + 245,943 - 120,400 = 435,443 \] 2. **Lavoie's Balance Before Admission**: - Initial Contribution: $487,700 - Plus Net Income Allocation: $370,057 - **Total Lavoie's Capital**: \[ 487,700 + 370,057 = 857,757 \] ### Step 2: Total Equity Before Roberts - **Total Equity**: \[ 435,443 + 857,757 = 1,293,200 \] ### Step 3: Roberts' Admission 1. **Roberts' Investment**: $144,900 for a 20% interest in the partnership. 2. **Total Partnership Equity After Roberts**: \[ 1,293,200 + 144,900 = 1,438,100 \] 3. **Roberts' Share Value**: \[ 1,438,100 \times 20\% = 287,620 \] ### Step 4: Bonus Distribution to Existing Partners 1. **Bonus to Existing Partners**: \[ 287,620 - 144,900 = 142,720 \] 2. **Distribution of Bonus**: - **Comeau's Share**: \[ \frac{435,443}{1,293,200} \times 142,720 \approx 48,085 \] - **Lavoie's Share**: \[ \frac{857,757}{1,293,200} \times 142,720 \approx 94,635 \] ### Step 5: Final Capital Balances 1. **Comeau's Final Capital**: \[ 435,443 + 48,085 = 483,528 \] 2. **Lavoie's Final Capital**: \[ 857,757 + 94,635 = 952,392 \] 3. **Roberts' Final Capital**: \[ 144,900 + 142,720 = 287,620 \] ### Summary of Final Capital Balances | Partner | Final Capital Balance | |-----------|----------------------| | Comeau | $483,528 | | Lavoie | $952,392 | | Roberts | $287,620 | | **Total** | **$1,723,540** | This calculation reflects the capital accounts for each partner immediately after the admission of Travis Roberts on April 1, 2023.