The partnership of Arun, Margot, and Tammy has been doing well. Arun wants to retire and move to another state for a once-in-a-lifetime opportunity. The partners' capital banaces prior to Arun's retirement are $60,000 each. Prepare a schedule showing how Arun's withdrawal should be divided assuming his buyout is: A. $70,000 B. $45,000 C. $60,000
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.
The
Withdrawal of a partnership lead to dissolving the partnership and a new partnership needs to be formed among the left partners. A new agreement must be made between the left partners.
A schedule showing how Arun's withdrawal should be divided assuming his buyout is:
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