B. Higgins, J. Mayo, and N. Rice have capital balances of $87,500, $80,000, and $66,000, respectively. They share income or loss on a 5:3:2 basis. Rice withdraws from the partnership under each of the following conditions. 1. Rice is paid $70,880 in cash from partnership assets, and a bonus is granted to the retiring partner. 2. Rice is paid $60,000 in cash from partnership assets, and bonuses are granted to the remaining partners.

B. Higgins, J. Mayo, and N. Rice have capital balances of $87,500, $80,000, and $66,000, respectively. They share income or loss on a 5:3:2 basis. Rice withdraws from the partnership under each of the following conditions. 1. Rice is paid $70,880 in cash from partnership assets, and a bonus is granted to the retiring partner. 2. Rice is paid $60,000 in cash from partnership assets, and bonuses are granted to the remaining partners.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Daggett, Lamppin, and Pendergast are partners who share profits and losses 50%, 30%, and 20%, respectively. Their capital balances are $143,000, $89,000, and $58,000, respectively. Assume instead that Daggett leaves the partnership. Daggett is paid $177,000 with a bonus to the retiring partner.Prepare the journal entry to record Daggett’s withdrawal. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit select an account title enter a debit amount enter a credit amount select an account title enter a debit amount enter a credit amount select an account title enter a debit amount enter a credit amount…
Partner Bob’s basis in his partnership interest is $50,000. What gain or loss is recognized, and what are Bob’s basis in the property received and his basis in his partnership interest, if the partnership makes the following independent proportionate nonliquidating distributions? Partnership distributes $40,000 in cash. Partnership distributes $60,000 cash. Partnership distributes $40,000 cash and accrual basis accounts receivable with a $20,000 basis and value.
Siham and Dalia are partners with capital balances of $60,000 and $40,000, respectively. Profits and losses are divided in the ratio of 60:40. Siham and Dalia decided to form a new partnership with Jamileh, who invested land valued at $40,000 for a 20 percent capital interest in the new partnership. Jamileh's cost of the land was $35,000. The partnership elected to use the bonus method to record Jamileh's admission into the partnership. Jamileh's capital account should be credited for a. $40,000. b. $28,000. c. $35,000. d. $27,000.
The E.N.D. partnership has the following capital balances as of the end of the current year: Pineda $ 270,000 Adams 240,000 Fergie 230,000 Gomez 220,000 Total capital $ 960,000 Answer each of the following independent questions: Assume that the partners share profits and losses 3:3:2:2, respectively. Fergie retires and is paid $269,000 based on the terms of the original partnership agreement. If the goodwill method is used, what is the capital balance of the remaining three partners? Assume that the partners share profits and losses 4:3:2:1, respectively. Pineda retires and is paid $355,000 based on the terms of the original partnership agreement. If the bonus method is used, what is the capital balance of the remaining three partners? (Do not round your intermediate calculations. Round your final answers to the nearest dollar amounts.)
Kern and Pate are partners with capital balances of $60,000 and $20,000, respectively. Profits and losses are divided in the ratio of 60:40. Kern and Pate decided to form a new partnership with Grant, who invested land valued at $15,000 for a 20% capital interest in the new partnership. Grant's cost of the land was $12,000. The partnership elected to use the bonus method to record the admission of Grant into the partnership. Grant's capital account should be credited for: A. $12,000 B. $15,000 C. $16,000 OD. $19,000
Foss, Albertson, and Espinosa are partners who share profits and losses 50%, 30%, and 20%, respectively. Their capital balances are $111,000, $62,000, and $32,000, respectively. Assume instead that Foss leaves the partnership. Foss is paid $129,000 with a bonus to the retiring partner. Prepare the journal entry to record Foss’s withdrawal. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
The E.N.D. partnership has the following capital balances as of the end of the current year: Pineda 160,000 Adams 140,000 Fergie 130,000 Gomez 120,000 Answer each A. Assume that the partners and losses 3:3:2:2,respectively. Fergie retires and is paid 151,000 based on the terms of the orginal partnership agreement. If the Goodwill method is used;what is the capital of the remaining three partners? B. Assume that the partners share profit and losses 4:3:2:1, respectively. Peneda retires and is paid 305,000 based on the terms of the orginal partnership agreement. If the bonus method is used, what is the capital balance of the remaining three partners? (Do not round intermediate calculations. Round to the nearest amounts. A. Pineda capital Balance__________ Adams capital Balance__________ Gomez capital Balance__________ B. Pineda capital Balance__________ Adams capital Balance__________ Gomez capital Balance__________
Myles Etter and Crystal Santori are partners who share in the income equally and have capital balances of $199,800 and $62,680, respectively. Etter, with the consent of Santori, sells one-third of his interest to Lonnie Davis. Assume the sale occurs on December 31. What entry is required by the partnership if the sales price is (a) $66,600? (b) $87,700?
Prior to liquidating their partnership, Craig and Jenny had capital accounts of $60,570 and $116,570, respectively. The partnership assets were sold for $214,550. The partnership had $23,370 of liabilities. Craig and Jenny share income and losses equally. Determine the amount received by Jenny as a final distribution from liquidation of the partnership.