Susan, Preston, and Roman are partners in a firm with the following capital account balances: Susan Preston $144,000 280,000 Roman 228,000 Preston is retiring from the partnership on December 31, 2024. The profit-and-loss-sharing ratio among Susan, Preston, and Roman is 1:2:3, respectively. Preston is paid $190,000 cash in full compensation for his capital account balance. Which of the following journal entries would the firm record for this transaction? O Preston, Capital 190,000 Cash O Preston Capital Cash Susan, Capital Roman, Capital O Cash Preston, Capital O Preston, Capital Cash Susan, Capital Roman, Capital 280,000 280,000 280,000 190,000 190,000 45,000 45,000 280,000 190,000 22,500 67,500
Susan, Preston, and Roman are partners in a firm with the following capital account balances: Susan Preston $144,000 280,000 Roman 228,000 Preston is retiring from the partnership on December 31, 2024. The profit-and-loss-sharing ratio among Susan, Preston, and Roman is 1:2:3, respectively. Preston is paid $190,000 cash in full compensation for his capital account balance. Which of the following journal entries would the firm record for this transaction? O Preston, Capital 190,000 Cash O Preston Capital Cash Susan, Capital Roman, Capital O Cash Preston, Capital O Preston, Capital Cash Susan, Capital Roman, Capital 280,000 280,000 280,000 190,000 190,000 45,000 45,000 280,000 190,000 22,500 67,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Capital Account Balances:**
Susan, Preston, and Roman are partners in a firm with the following capital account balances:
- **Susan:** $144,000
- **Preston:** $280,000
- **Roman:** $228,000
Preston is retiring from the partnership on December 31, 2024. The profit-and-loss-sharing ratio among Susan, Preston, and Roman is 1:2:3, respectively. Preston is paid $190,000 cash in full compensation for his capital account balance. Which of the following journal entries would the firm record for this transaction?
1. **Entry 1:**
- *Preston, Capital* $190,000
- *Cash* $190,000
2. **Entry 2:**
- *Preston Capital* $280,000
- *Cash* $190,000
- *Susan, Capital* $45,000
- *Roman, Capital* $45,000
3. **Entry 3:**
- *Cash* $280,000
- *Preston, Capital* $280,000
4. **Entry 4:**
- *Preston, Capital* $280,000
- *Cash* $190,000
- *Susan, Capital* $22,500
- *Roman, Capital* $67,500
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