Trail Equipment is a partnership owned by three individuals. The partners share profits and losses in the

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Trail Equipment is a partnership owned by three individuals. The partners share profits and losses in the ratio of 30 percent to Karen Tenne, 40 percent to Frank Durn, and 30 percent to Erin Hana. At December 31, 2017, the firm has the following balance sheet amounts:
Trail Equipment is a partnership owned by three individuals. The

Karen Tenne withdraws from the partnership on December 31.
Required
Record Tenne's withdrawal from the partnership under the following independent plans:
a. In a personal transaction, Tenne sells her equity in the partnership to Michael Adams, who pays Tenne $176,000 for her interest. Durn and Hana agree to accept Adams as a partner.
b. The partnership pays Tenne cash of $72,000 and gives her a note payable for the remainder of her book equity in settlement of her partnership interest.
c. The partnership pays Tenne $260,000 cash for her equity in the partnership.
d.
The partners agree that the equipment is worth $548,000 (net). After the revaluation, the partnership settles with Tenne by giving her cash of $44,000 and inventory for the remainder of her book equity.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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Horngrens Accounting

ISBN: 978-0133855388

10th Canadian edition Volume 2

Authors: Tracie L. Miller Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann L. Johnston, Peter R. Norwood

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