In the LMK partnership, Luiss capital is $41,300, Martys is $51,800, and Karls is $31,200. They share
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Question:
In the LMK partnership, Luiss capital is $41,300, Martys is $51,800, and Karls is $31,200. They share income in a 4:1:1 ratio, respectively. Karl is retiring from the partnership.
Required:
Prepare journal entries to record Karls withdrawal according to each of the following independent assumptions:
a. Karl is paid $39,400, and no goodwill is recorded.
b. Karl is paid $43,700, and only his share of the goodwill is recorded.
c. Karl is paid $35,100, and all implied goodwill is recorded.
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