Question
In: Accounting
On January 1, 2016, Jack and Maya formed a partnership, JM Co. with the agreement that...
On January 1, 2016, Jack and Maya formed a partnership, JM Co.
with the agreement that income would be split equally by the
partners. Jack's initial investment consisted of cash of $5,000 and
a building with a fair market value of $105,000. Maya's initial
investment consisted of $110,000 cash. For 2016, the first year of
operations, the net loss for the partnership was $18,000. During
the first year, neither partner withdrew any money from the
partnership. The partnership has a December 31 year end.
On December 31, 2017, Maya decided to withdraw from the
business. During 2017, business profit was $20,000 and Maya's cash
withdrawals were $50,000. Upon her leaving the business at year
end, Maya received $65,000 cash.
Required:
Prepare a schedule to show the effect of these transactions on
equity over the two years, 2016 and 2017 before Maya's decision to
withdraw from the partnership.
Prepare the entry to withdraw Maya from the business
What is Jack's ending capital balance after Maya's
withdrawal?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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