Hu-Kang-Lo Oriental Design is a partnership owned by three individuals. The partners share profits and losses in

Question:

Hu-Kang-Lo Oriental Design is a partnership owned by three individuals. The partners share profits and losses in the ratio of 30% to Hu, 40% to Kang, and 30% to Lo. At December 31, 2012, the firm has this balance sheet:

Hu-Kang-Lo Oriental Design is a partnership owned by three indiv

Hu withdraws from the partnership on this date.
Requirements
Record Hu€™s withdrawal from the partnership under the following independent plans:
1. In a personal transaction, Hu sells her equity to Win, who pays Hu $110,000 for her interest. Kang and Lo agree to accept Win as a partner.
2. The partnership pays Hu cash of $5,000 and gives her a note payable for the remainder of her book equity in settlement of her partnership interest.
3. The partnership pays Hu $50,000 for her book equity.
4. The partners agree that the equipment is worth $146,000 and that accumulated depreciation should remain at $39,000. After the revaluation, the partnership settles with Hu by giving her cash of $10,000 and inventory for the remainder of her bookequity.

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...
Fantastic news! We've located the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

Accounting

ISBN: 978-0132569309

9th Edition

Authors: Charles T. Horngren, Walter T. Harrison Jr., M. Suzanne Oliv

Question Posted: