E 16-11 Partner retirement entriesCapital balances and profit- and loss-sharing ratios for the Nix, Man, and Per partnership on December 31, 2016, just before the retirement of Nix, are as follows:Nix capital (30%)$128,000Man capital (30%)$140,000Per capital (40%)$160,000On January 2, 2017, Nix is paid $170,000 cash on his retirement.RequiredPrepare the journal entry or entries to record Nix’s retirement assuming that goodwill, as implied by the payment to Nix, is recorded on the partnership books.

Compute the goodwill of the firm:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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E 16-11 Partner retirement entries

Capital balances and profit- and loss-sharing ratios for the Nix, Man, and Per partnership on December 31, 2016, just before the retirement of Nix, are as follows:

Nix capital (30%)	$128,000
Man capital (30%)	$140,000
Per capital (40%)	$160,000

On January 2, 2017, Nix is paid $170,000 cash on his retirement.

Required

Prepare the journal entry or entries to record Nix’s retirement assuming that goodwill, as implied by the payment to Nix, is recorded on the partnership books.

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