Question: Sam Richard and Tom are partners They share income and
Sam, Richard, and Tom are partners. They share income and losses in the ratio of 3:2:1. Tom’s Capital account has a $240,000 balance. Sam and Richard have agreed to let Tom take $320,000 of the company’s cash when he retires from the business. What journal entry must be made on the partnership’s books when Tom retires, assuming that a bonus to Tom is recognized and absorbed by the remaining partners?
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