Problem
1) Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammy's admission are $50,000 each. Organize a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is:
a) $20,000
b) $80,000
c) $50,000.
In addition, show the resulting journal entries to each of the three partners' capital accounts.
2) When a partnership is liquidated, any gains or losses realized by the sale of noncash assets are allocated to the partners based on their income-sharing ratio. Why?