On December 31, the capital balances and income ratios in the Elhor Company are as follows....

Transcribed Image Text:

On December 31, the capital balances and income ratios in the Elhor Company are as follows. Instructions Partner A. Ely L. Howe Capital Balance Income Ratio $70,000 60% 30,000 30 B. Ross 20,000 10 (a) Journalize the withdrawal of Ross under each of the following independent assumptions. (1) Each of the remaining partners agrees to pay $13,000 in cash from personal funds to purchase Ross's ownership equity. Each receives 50% of Ross's equity. (2) Howe agrees to purchase Ross's ownership interest for $18,000 in cash. (3) From partnership assets, Ross is paid $26,000, which includes a bonus to the retiring partner. (4) Ross is paid $11,000 from partnership assets. Bonuses to the remaining partners are recognized. (b) If Howe's capital balance after Ross's withdrawal is $32,000, what were (1) the total bonus to the remaining partners and (2) the cash paid by the partnership to Ross? On December 31, the capital balances and income ratios in the Elhor Company are as follows. Instructions Partner A. Ely L. Howe Capital Balance Income Ratio $70,000 60% 30,000 30 B. Ross 20,000 10 (a) Journalize the withdrawal of Ross under each of the following independent assumptions. (1) Each of the remaining partners agrees to pay $13,000 in cash from personal funds to purchase Ross's ownership equity. Each receives 50% of Ross's equity. (2) Howe agrees to purchase Ross's ownership interest for $18,000 in cash. (3) From partnership assets, Ross is paid $26,000, which includes a bonus to the retiring partner. (4) Ross is paid $11,000 from partnership assets. Bonuses to the remaining partners are recognized. (b) If Howe's capital balance after Ross's withdrawal is $32,000, what were (1) the total bonus to the remaining partners and (2) the cash paid by the partnership to Ross?

Answer rating: 100% (QA)

Answer Lets tackle each part of the question step by step a Journ... View the full answer