Prepare the journal entry on the books of the partnership to record the withdrawal of Stine
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Baker, Gregg, and Stine share income and losses in a ratio of 4:1:5, respectively. The capital account balances of the partners are as follows:
Baker, Capital $150,000
Gregg, Capital 90,000
Stine, Capital 60,000
Prepare the
following independent circumstances:
(a) The partners agree that Stine should be paid $70,000 by the partnership for his interest.
(b) The partners agree that Stine should be paid $45,000 by the partnership for his interest.
(c) Baker agrees to pay Stine $40,000 for one-half of his capital interest and Gregg agrees to pay Stine
$40,000 for one-half of his capital interest in a personal transaction among the partner
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