The capital account balances and profit and loss sharing ratios of the (A), (B), (C) and (D) partnership on December 31, 2014, after closing entries are as follows: Partner (A) (? %) $100,000 partner (B) (20%) $100,000 Partner (C) (10%) $40,000 partner (D) (20%) $60,000 Partner (B) is retiring from the partnership, and the partners agree that he will receive a cash payment of $80,000 in final settlement of his interest. The journal entry to record partner (B) retirement assuming that assets are revalued to the basis implied by the difference is a. Dr. (A) capital $50,000, (B) capital $20,000, (C) capital $10,000, (D) capital $20,000 /Cr. Net Assets $100,000. a. Dr. (A) capital $50,000, (B) capital $20,000, (C) capital $10,000, (D) capital $20,000 /Cr. Net Assets $100,000. b. Dr. (A) capital $75,000, (B) capital $30,000, (C) capital $15,000, (D) capital $30,000 /Cr. Net Assets $150,000. b. Dr. (A) capital $75,000, (B) capital $30,000, (C) capital $15,000, (D) capital $30,000 /Cr. Net Assets $150,000. c. Dr. (A) capital $40,000, (B) capital $16,000, (C) capital $8,000, (D) capital $16,000 /Cr. Net Assets $80,000. c. Dr. (A) capital $40,000, (B) capital $16,000, (C) capital $8,000, (D) capital $16,000 /Cr. Net Assets $80,000. d. Dr. (A) capital $60,000, (B) capital $24,000, (C) capital $12,000, (D) capital $24,000 /Cr. Net Assets $120,000.
The capital account balances and profit and loss sharing ratios of the (A), (B), (C) and (D) partnership on December 31, 2014, after closing entries are as follows: Partner (A) (? %) $100,000 partner (B) (20%) $100,000 Partner (C) (10%) $40,000 partner (D) (20%) $60,000 Partner (B) is retiring from the partnership, and the partners agree that he will receive a cash payment of $80,000 in final settlement of his interest. The journal entry to record partner (B) retirement assuming that assets are revalued to the basis implied by the difference is a. Dr. (A) capital $50,000, (B) capital $20,000, (C) capital $10,000, (D) capital $20,000 /Cr. Net Assets $100,000. a. Dr. (A) capital $50,000, (B) capital $20,000, (C) capital $10,000, (D) capital $20,000 /Cr. Net Assets $100,000. b. Dr. (A) capital $75,000, (B) capital $30,000, (C) capital $15,000, (D) capital $30,000 /Cr. Net Assets $150,000. b. Dr. (A) capital $75,000, (B) capital $30,000, (C) capital $15,000, (D) capital $30,000 /Cr. Net Assets $150,000. c. Dr. (A) capital $40,000, (B) capital $16,000, (C) capital $8,000, (D) capital $16,000 /Cr. Net Assets $80,000. c. Dr. (A) capital $40,000, (B) capital $16,000, (C) capital $8,000, (D) capital $16,000 /Cr. Net Assets $80,000. d. Dr. (A) capital $60,000, (B) capital $24,000, (C) capital $12,000, (D) capital $24,000 /Cr. Net Assets $120,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
The capital account balances and profit and loss sharing ratios of the (A), (B), (C) and (D) partnership on December 31, 2014, after closing entries are as follows:
Partner (A) (? %) $100,000 partner (B) (20%) $100,000
Partner (C) (10%) $40,000 partner (D) (20%) $60,000
Partner (B) is retiring from the partnership, and the partners agree that he will receive a cash payment of $80,000 in final settlement of his interest.
The journal entry to record partner (B) retirement assuming that assets are revalued to the basis implied by the difference is
a.
Dr. (A) capital $50,000, (B) capital $20,000, (C) capital $10,000, (D) capital $20,000 /Cr. Net Assets $100,000.
a. Dr. (A) capital $50,000, (B) capital $20,000, (C) capital $10,000, (D) capital $20,000 /Cr. Net Assets $100,000.
b.
Dr. (A) capital $75,000, (B) capital $30,000, (C) capital $15,000, (D) capital $30,000 /Cr. Net Assets $150,000.
b. Dr. (A) capital $75,000, (B) capital $30,000, (C) capital $15,000, (D) capital $30,000 /Cr. Net Assets $150,000.
c.
Dr. (A) capital $40,000, (B) capital $16,000, (C) capital $8,000, (D) capital $16,000 /Cr. Net Assets $80,000.
c. Dr. (A) capital $40,000, (B) capital $16,000, (C) capital $8,000, (D) capital $16,000 /Cr. Net Assets $80,000.
d.
Dr. (A) capital $60,000, (B) capital $24,000, (C) capital $12,000, (D) capital $24,000 /Cr. Net Assets $120,000.
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