The WhyEyeOughta general partnership is comprised of three general partners; Mo, Larry, & Curley. The partnership

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The WhyEyeOughta general partnership is comprised of three general partners; Mo, Larry, & Curley. The partnership
agreement calls for profits of the partnership to be allocated as per the following:
Capital balances for each partner as of December 31st, 2014 are as follows:
	Mo	$200 000		Larry	$50 000		Curley	$250 000
The partnership agreement calls for the following distribution of profit (or loss):
A) If there is a profit, each partner is to receive 10% interest on their capital balance at year-end in excess of $100,000
B) Mo & Larry are to receive salaries of $2,000 each; Curley is to receive a salary of $5,000
C) Larry is to receive a bonus of 20% of partnership profit
D) Any remaining profit or loss is to be allocated to Mo, Larry, & Curley in the ratio of 3:1:1 respectively

The Fellowship general partnership is comprised of three general partners; Gandolf, Boromir, & Frodo. The partnership
agreement calls for profits of the partnership to be allocated as per the following:
Capital balances for each partner as of December 31st, 2014 are as follows:
	Gandolf	$400 000		Boromir	$650 000		Frodo	$300 000
The partnership agreement calls for the following distribution of profit (or loss):
A) Boromir is to receive a bonus of 15% of partnership profit.
B) Gandolf and Boromir are to receive salaries of $70,000 each, Frodo is to receive a salary of $25,000 if there’s a profit.
C) If there’s a profit, each partner is to receive 7% interest on their capital balance at year-end in excess of $300,000.
D) Any remaining profit or loss is to be allocated to Gandolf, Boromir, & Frodo in the ratio of 1:2:1 respectively

Scenario 1: New Partner D contributes $2,000,000 for a 50% capital share of the firm.

Scenario 2: New Partner D contributes $3,000,000 for a 50% capital share of the firm. The firm
uses the bonus method of accounting for new partners.

Scenario 3: New Partner D contributes $3,000,000 for a 50% capital share of the firm. The firm uses
the goodwill method, and any excess over FMV is attributable to existing goodwill.

Scenario 4: New Partner D contributes $400,000 for 25% share of the firm. The firm uses the bonus

method, and any bonus is attributable to the new partner.