The capital account balances and profit-and-loss-sharing ratios of the Byd, Box, Dar, and Fus partnership at December 31, 2021, after closing entries are as follows: Byd Capital (30%) 30,000 Box Capital (20%) 25,000 Dar Capital (40%) 25,000 Fus Capital (10%) 20,000 Total 100,000 Box is retiring from the partnership, and the partners agree that he will receive a cash payment of $35,000 in final settlement of his interest. The book values of partnership assets and liabilities are equal to fair values, except for a building with a book value of $15,000 and a fair value of $25,000. 1) Prepare the journal entry to record Box’s retirement assuming the bonus approach is used. 2) Prepare the journal entry to record Box’s retirement assuming the assets are revalued to the basis implied by the excess payment to Box.
The capital account balances and profit-and-loss-sharing ratios of the Byd, Box, Dar, and Fus partnership at December 31, 2021, after closing entries are as follows: Byd Capital (30%) 30,000 Box Capital (20%) 25,000 Dar Capital (40%) 25,000 Fus Capital (10%) 20,000 Total 100,000 Box is retiring from the partnership, and the partners agree that he will receive a cash payment of $35,000 in final settlement of his interest. The book values of partnership assets and liabilities are equal to fair values, except for a building with a book value of $15,000 and a fair value of $25,000. 1) Prepare the journal entry to record Box’s retirement assuming the bonus approach is used. 2) Prepare the journal entry to record Box’s retirement assuming the assets are revalued to the basis implied by the excess payment to Box.
The capital account balances and profit-and-loss-sharing ratios of the Byd, Box, Dar, and Fus partnership at December 31, 2021, after closing entries are as follows: Byd Capital (30%) 30,000 Box Capital (20%) 25,000 Dar Capital (40%) 25,000 Fus Capital (10%) 20,000 Total 100,000 Box is retiring from the partnership, and the partners agree that he will receive a cash payment of $35,000 in final settlement of his interest. The book values of partnership assets and liabilities are equal to fair values, except for a building with a book value of $15,000 and a fair value of $25,000. 1) Prepare the journal entry to record Box’s retirement assuming the bonus approach is used. 2) Prepare the journal entry to record Box’s retirement assuming the assets are revalued to the basis implied by the excess payment to Box.
The capital account balances and profit-and-loss-sharing ratios of the Byd, Box, Dar, and Fus partnership at December 31, 2021, after closing entries are as follows:
Byd Capital (30%) 30,000
Box Capital (20%) 25,000
Dar Capital (40%) 25,000
Fus Capital (10%) 20,000
Total 100,000
Box is retiring from the partnership, and the partners agree that he will receive a cash payment of $35,000 in final settlement of his interest. The book values of partnership assets and liabilities are equal to fair values, except for a building with a book value of $15,000 and a fair value of $25,000.
1) Prepare the journal entry to record Box’s retirement assuming the bonus approach is used.
2) Prepare the journal entry to record Box’s retirement assuming the assets are revalued to the basis implied by the excess payment to Box.
Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement 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, and drawings of a partner.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
