A summary balance sheet for the Akerly, Baskin, and Crow partnership on December 31, 2014, is shown below. Partners Akerly, Baskin, and Crow allocate profit and loss in their respective ratios of 3:2:1. The partnership agreed to pay partner Baskin $500,000 for his partnership interest upon his retirement from the partnership on January 1, 2015. The partnership financials on January 1, 2015, are:

Assets

Cash $ 70,000

Marketable securities 190,000

Inventory 360,000

Land 110,000

Building-net 570,000

Total assets $1,300,000

Equities

Akerly, capital $630,000

Baskin, capital 420,000

Crow, capital 250,000

Total equities $1,300,000

Required:

Prepare the journal entry to reflect Baskin's retirement from the partnership:

1. Assuming a bonus to Baskin.

2. Assuming a revaluation of total partnership capital based on excess payment.

3. Assuming goodwill equal to the excess payment is recorded

Answer rating: 100% (QA)

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