Prior to the distribution of cash to the partners, the accounts in the TSM Company are: Cash

Question:

Prior to the distribution of cash to the partners, the accounts in the TSM Company are: Cash $28,000; Tyler, Capital (Cr.) $17,000; Smith, Capital (Cr.) $15,000; and Mott, Capital (Dr.) $4,000. The income ratios are 5 : 3 : 2, respectively.

Instructions
  (a) Prepare the entry to record (1) Mott’s payment of $4,000 in cash to the partnership and (2) the distribution of cash to the partners with credit balances.
  (b) Prepare the entry to record (1) the absorption of Mott’s capital deficiency by the other partners and (2) the distribution of cash to the partners with credit balances.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Accounting Principles

ISBN: 978-0470534793

10th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Question Posted: