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Capital balances and profit and loss sharing ratios of the partners in the BIG Entertainment Galley are as follows:
Ben capital (50%) …. $ 700,000
Irv capital (30%) ….. 480,000
Geo capital (20%) …… 300,000
Total ………. $1,480,000
Ben needs money and agrees to assign half of his interest in the partnership to Pet for $180,000 cash. Pet pays $180,000 directly to Ben.
REQUIRED
1. Prepare a journal entry to record the assignment of half of Ben?s interest in the partnership to Pet.
2. What is the total capital of the BIG partnership immediately after the assignment of the interest to Pet?
An annually increasing uniform gradient series begins at the end of the 1st year with a payment of $1500 which increases each year by G and ends after the 20th year. What is the value of gradient G that makes the gradient series equivalent to an equal series of payment of $20,000 each year for 20 years at 10% compounded annually?
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