Part 1. Gibbs, Mier, and Hill are partners and share income and loss in a 5:1:4 ratio.
Question:
Prepare journal entries to record Gibbs’s April 30 withdrawal from the partnership under each of the following separate assumptions: Gibbs
(a) Sells her interest to Brady for $250,000 after Mier and Hill approve the entry of Brady as a partner;
(b) Gives her interest to a daughter-in-law, Cannon, and thereafter Mier and Hill accept Cannon as a partner;
(c) Is paid $303,000 in partnership cash for her equity;
(d) Is paid $175,000 in partnership cash for her equity; and
(e) Is paid $100,000 in partnership cash plus manufacturing equipment recorded on the partnership books at $269,000 less its accumulated depreciation of $168,000.
Part 2. Assume that Gibbs does not retire from the partnership described in Part 1. Instead, Brise is admitted to the partnership on April 30 with a 20% equity. Prepare journal entries to record the entry of Brise under each of the following separate assumptions: Brise invests
(a) $150,000;
(b) $98,000; and
(c) $213,000.
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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Related Book For
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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