Solved: Each of the continuing partners agrees to pay 18000 in cash, Accounting Basics

Each of the continuing partners agrees to pay 18000 in cash

On December 31, the capital balances and income ratios in FAD Company are as follows

Instructions

(a) Journalize the withdrawal of Durham under each of the following assumptions.

(1) Each of the continuing partners agrees to pay $18,000 in cash from personal funds to purchase Durham's ownership equity. Each receives 50% of Durham's equity.

(2) Ames agrees to purchase Durham's ownership interest for $25,000 cash.

(3) Durham is paid $34,000 from partnership assets, which includes a bonus to the retiring partner.

(4) Durham is paid $22,000 from partnership assets, and bonuses to the remaining partners are recognized.

(b) If Ames's capital balance after Durham's withdrawal is $42,400 what were

(1) The total bonus to the remaining partners and

(2) The cash paid by the partnership toDurham?

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Accounting Basics: Each of the continuing partners agrees to pay 18000 in cash

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Accounting Basics: Each of the continuing partners agrees to pay 18000 in cash

Reference No:- TGS01516302

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