A, B and C have capital of $120,000, $70,000, and $60,000 respectively. The partners share profit and loss in the agreed ratio of 40/30/30. D joins the partnership with $80,000 cash contribution in exchange for 20% interest in capital. The existing assets of the original partnership are undervalued by $40,000. The original partners share balance of profit and loss in proportion to the original percent.

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Instructions: Calculate the ending capital balances for each individual in the new partnership and show journal entries assuming:

1. bonus method

2. good will method