Dave, Allen and Matt share profits and losses in the ratio of 50:30:20. Allen withdrew from the partnership December 31. 2014. Capital account balances are as follows:

Dave, Capital $ 80,000

Allen, Capital $ 80,000

Matt, Capital $ 62,000

Required: Prepare the journal entry or entries to record the withdrawal of Allen, given each of the following situations. Assume the bonus method is used to account for the withdrawal.

1. Allen receives $35,000 cash and a $75,000 note from the partnership for his interest.

2. The partnership gives Allen $35,000 cash and equipment with a book value and a fair value of $40,000 for his interest.

3. The partnership gives Allen $100,000 cash for his interest.

Answer rating: 100% (QA)

1 Allen receives 35000 cash and a 75000 note from the partnership for his interest First we need to ... View the full answer