Nabiha, Abdullah, and Samina are partners with capital account balances of 50,000, 75,000, and 25,000, respectively. Income and losses are divided in a 4:4:2 ratio. When Samina decided to withdraw, the partnership revalued its assets from 225,000 to 250,000, which represented an increase in the value of inventory of 5,000 and an increase in the value of land of 20,000. Samina was then given 15,000 cash and a note for 40,000 for his withdrawal from the partnership. Required: A. Prepare the journal entry to record the revaluation of the partnership’s assets.
Nabiha, Abdullah, and Samina are partners with capital account balances of 50,000, 75,000, and 25,000, respectively. Income and losses are divided in a 4:4:2 ratio. When Samina decided to withdraw, the partnership revalued its assets from 225,000 to 250,000, which represented an increase in the value of inventory of 5,000 and an increase in the value of land of 20,000. Samina was then given 15,000 cash and a note for 40,000 for his withdrawal from the partnership. Required: A. Prepare the journal entry to record the revaluation of the partnership’s assets.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Nabiha, Abdullah, and Samina are partners with capital account balances
of 50,000, 75,000, and 25,000, respectively. Income and losses are
divided in a 4:4:2 ratio. When Samina decided to withdraw, the
represented an increase in the value of inventory of 5,000 and an increase
in the value of land of 20,000. Samina was then given 15,000 cash and a
note for 40,000 for his withdrawal from the partnership.
Required:
A. Prepare the
assets.
B. Prepare the journal entry to record the withdrawal using the following
independent methods.
(1) Bonus.
(2) Partial
(3) Full goodwill amount.
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