Problems 15 and 16 are independent problems based on the following capital account balances:
15. Darrow invests $270,000 in cash for a 30 percent ownership interest. The money goes to the original partners. Goodwill is to be recorded. How much goodwill should be recognized, and what is Darrow’s beginning capital balance?
a. $410,000 and $270,000 b. $140,000 and $270,000 c. $140,000 and $189,000 d. $410,000 and $189,000
16. Darrow invests $250,000 in cash for a 30 percent ownership interest. The money goes to the business. No goodwill or other revaluation is to be recorded. After the transaction, what is Jennings’s capital balance?
a. $160,000 b. $168,000 c. $170,200 d. $171,200
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