Partnership Retirement-Various Situations: The Fahad, Khalid, and Majid partnership balance sheet and profit and loss percentages at June 30, 2011, are summarized as follows: Fahad capital (30%) Khalid capital (30%) Majid capital (40%) 185,000 Assets 500,000 140,000 175,000 500,000 500,000 On July 1, 2011, the partners agree that Fahad is to retire immediately and receive $161,000 for his partnership interest. Required: Prepare journal entries to illustrate three possible methods of accounting for the retirement of Fahad.

Partnership Retirement-Various Situations: The Fahad, Khalid, and Majid partnership balance sheet and profit and loss percentages at June 30, 2011, are summarized as follows: Fahad capital (30%) Khalid capital (30%) Majid capital (40%) 185,000 Assets 500,000 140,000 175,000 500,000 500,000 On July 1, 2011, the partners agree that Fahad is to retire immediately and receive $161,000 for his partnership interest. Required: Prepare journal entries to illustrate three possible methods of accounting for the retirement of Fahad.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Question

Chapter 2: Partnerships
Exercise –
- 5
Partnership Retirement-Various Situations:
The Fahad, Khalid, and Majid partnership balance sheet and profit and loss percentages at June
30, 2011, are summarized as follows:
Fahad capital (30%)
Khalid capital (30%)
Majid capital (40%) 185,000
Assets
500,000
140,000
175,000
500,000
500,000
On July 1, 2011, the partners agree that Fahad is to retire immediately and receive $161,000 for
his partnership interest.
Required:
Prepare journal entries to illustrate three possible methods of accounting for the retirement of
Fahad.

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