Question
In: Finance
Suppose Sean is withdrawing from the partnership of Sean, Mohid, and Beth. The partners share profits...
Suppose Sean is withdrawing from the partnership of Sean, Mohid, and Beth. The partners share profits and losses in a 1:2:3 ratio for Sean, Mohid, and Beth, respectively. After the revaluation of assets, Sean’s Capital balance is $40,000, and the other partners agree to pay him $30,000. Mohid and Beth agree to a new profit-and-loss-sharing ratio of 2:3 for Mohid and Beth, respectively. Journalize the payment to Sean for his withdrawal from the partnership on August 31.
5 Journalize withdrawal of a partner
Solutions
Expert Solution
ANSWER
JOURNAL ENTRY FOR WITHDRAWAL OF PARTNER
AS SEAN IS WITHDRAWING , IT IS ASSUMED THAT $ 30000 IS GIVEN BY MOHID AND BETH TO SEAN AS GOODWILL SHARE IN RATIO OF 2:3 BY MOHID AND BETH RESPECTIVELY. $ 12000 BY MOHID AND $ 18000 BY BETH
JOURNAL ENTRY WILL BE ON 31ST AUGUST
MOHID CAPITAL A/C DR...........................$12000
BETH CAPITAL A/C DR.............................$18000
TO SEAN CAPITAL A/C CR..............................$30000
(BEING GOODWILL AMOUNT GIVEN TO SEAN BY OTHER PARTNERS )
NOW SEAN BALANCE AMOUNT IN HIS CAPITAL WILL BE $ 40000+$30000=$70000
JOURNAL ENTRY WILL BE
SEAN CAPITAL A/C DR......................$70000
TO BANK A/C DR..................................$70000
(BEING PAYMENT DONE TO SEAN ON WITHDRAWAL FROM PARTNERSHIP)
jeff jeffy answered 2 years agoRelated Solutions
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $5,000. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
50,000
Liabilities
$
40,000
Noncash assets
150,000
Alex, capital
90,000
Bess, capital
70,000
Total assets
$
200,000
Total liabilities and capital
$
200,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $9,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
59,000
Liabilities
$
44,500
Noncash assets
180,000
Alex, capital
108,000
Bess, capital
86,500
Total assets
$
239,000
Total liabilities and capital
$
239,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $9,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
71,000
Liabilities
$
61,000
Noncash assets
300,000
Alex, capital
180,000
Bess, capital
130,000
Total assets
$
371,000
Total liabilities and
capital
$
371,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $6,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
53,000
Liabilities
$
41,500
Noncash assets
120,000
Alex, capital
72,000
Bess, capital
59,500
Total assets
$
173,000
Total liabilities and capital
$
173,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $6,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
53,000
Liabilities
$
41,500
Noncash assets
120,000
Alex, capital
72,000
Bess, capital
59,500
Total assets
$
173,000
Total liabilities and capital
$
173,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 70:30 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $4,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
46,000
Liabilities
$
35,000
Noncash assets
115,000
Alex, capital
80,500
Bess, capital
45,500
Total assets
$
161,000
Total liabilities and capital
$
161,000
Part A: Prepare...
Fred and George have been in partnership for many years. The partners, who share profits and...
Fred and George have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $10,000. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
100,000
Liabilities
$
80,000
Noncash assets
200,000
Fred, capital
100,000
George, capital
120,000
Total assets
$
300,000
...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $8,500. At the
date the partnership ceases operations, the balance sheet is as
follows: Cash $ 57,000 Liabilities $ 43,500 Noncash assets 160,000
Alex, capital 96,000 Bess, capital 77,500 Total assets $ 217,000
Total liabilities and capital $ 217,000 Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 70:30 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $8,000. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
56,000
Liabilities
$
43,000
Noncash assets
150,000
Alex, capital
105,000
Bess, capital
58,000
Total assets
$
206,000
Total liabilities and capital
$
206,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $9,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
71,000
Liabilities
$
61,000
Noncash assets
300,000
Alex, capital
180,000
Bess, capital
130,000
Total assets
$
371,000
Total liabilities and
capital
$
371,000
Part A: Prepare...
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