Question

CP 12–4 Assume the following information just prior to the withdrawal of Partner X: Assets Liabilities Cash$20,000 Accounts payable$5,000 Inventory 50,000 Partners’ Capital X,Capital$10,000 Y,Capital 20,000 Z, Capital 35,00065,000$70,000$70,000

Required: Prepare journal entries to record the following unrelated scenarios:1.Partner X sells his interest to new partner T for$25,000

.2.Partner X sells his interest to partner Y for$30,000

.3.Partner X sells his interest and is paid a share of partnership net assets as follows Cash$5,000 Inventory 5,000 Accounts payable(2,000)$8,000 Partner Y receives a 60% share of the partnership interest of X.Partner Z receives 40%.

Answer 1

According to given data, the following solution is given below:

Date	explanation	PR	DT	CT
1	X's Capital		10,000
	T's Capital			10,000
2	X's Capital		10,000
	Y's Capital			10,000
3	X's Capital		10,000
	Accounts Payable		2,000
	Cash			5,000
	Inventory			5,000
	Y's Capital			1,200
	Z's Capital			800

{ Please record, that within 1 and 2, listing is executed for 10,000 because the extra earned by X is his own profit. }
No payment has occurredreceived by the partnership.

In third, X is given 2000 less, which is charged to Y and Z in 6:4 ratio .