On December 31, 2020, the unadjusted Statement of Financial Position of ABC Partnership shows the following data with profit or loss sharing agreement of 2:3:5: Total Assets 100,000 Total Liabilities 40,000 A, Capital В, Саpital C, Capital 10,000 20,000 30,000 On December 31, 2020, A decided to retire from the partnership. However, before the distribution of cash to A, data errors were discovered during the pre-retirement audit: • During 2020, the property, plant and equipment has not been subjected to revaluation by 15,000; The 2020 net income is overstated by 5,000. After the adjustment, A received retirement pay of 15,000 for his capital interest.
On December 31, 2020, the unadjusted Statement of Financial Position of ABC Partnership shows the following data with profit or loss sharing agreement of 2:3:5: Total Assets 100,000 Total Liabilities 40,000 A, Capital В, Саpital C, Capital 10,000 20,000 30,000 On December 31, 2020, A decided to retire from the partnership. However, before the distribution of cash to A, data errors were discovered during the pre-retirement audit: • During 2020, the property, plant and equipment has not been subjected to revaluation by 15,000; The 2020 net income is overstated by 5,000. After the adjustment, A received retirement pay of 15,000 for his capital interest.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
What is the capital balance of B after the retirement of A?
21,875
18,875
21,000
23,000
Transcribed Image Text:On December 31, 2020, the unadjusted Statement of Financial Position of ABC Partnership shows
the following data with profit or loss sharing agreement of 2:3:5:
Total Assets
100,000
Total Liabilities
40,000
A. Capital
B, Capital
C, Capital
10,000
20,000
30,000
On December 31, 2020, A decided to retire from the partnership. However, before the distribution
of cash to A, data errors were discovered during the pre-retirement audit:
• During 2020, the property, plant and equipment has not been subjected to revaluation
by 15,000;
The 2020 net income is overstated by 5,000.
After the adjustment, A received retirement pay of 15,000 for his capital interest.
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