Accounting for withdrawal of a partner
On March 31, Sandy retires from the partnership of Sandy, Bob, and Tim. The partner capital balances are Sandy, $39,000; Bob, $47,000; and Tim, $18,000. The partners have the assets revalued to current market values. The appraiser reports that the value of the inventory should be decreased by $7,000, and the land should be increased by $27,000. The profit-and-loss ratio has been 5:3:2 for Sandy, Bob, and Tim, respectively. In retiring from the firm, Sandy receives $55,000 cash.
Requirements
1. Journalize the asset revaluations.
2. Journalize Sandy's withdrawal from the partnership.