Question

Meir, Benson, and Lau are partners and share income and loss in a 1:4:5 ratio. The partnership's capital balances are as follows: Meir, $38,000; Benson, $159,000; and Lau, $203,000. Benson decides to withdraw from the partnership, and the partners agree not to have the assets revalued upon Benson's retirement.

Prepare the journal entry to record Benson's withdrawal from the partnership under each of the following independent assumptions. (Do not round intermediate calculations.)

Benson (a) sells her interest to North for $160,000 after Meir and Lau approve the entry of North as a partner; (b) gives her interest to a son-in-law, Schmidt, and thereafter Meir and Lau accept Schmidt as a partner; (c) is paid $159,000 in partnership cash for her equity; (d) is paid $197,000 in partnership cash for her equity; and (e) is paid $12,000 in partnership cash plus equipment recorded on the partnership books at $32,000 less its accumulated depreciation of $11,600.
  a.record the withdrawl of Benson sells her interest to North for $160,000 after Meir and Lau approve the entry of North as a partner.

b. record the withdrawl of Benson on the assumption that she gives her interest to a son in low, Schmidt and thereafter Meir and Lau accept Schmidt as a partner.

c. Record the withdrawl of Benson on the assumption that she is paid $159,000 in partnership cash for her equity.

d. Record the withdrawl of Benson on the assumption that she is paid $197,000 in partnership cash for her equity.e.

e. Record the withdrawl of Benson on the assumption that she is paid $12,000 in partnership cash plus equipment recorded on the partnership books at $32,000 less its accumulated depreciation of $11,600 for her equity.

Answer 1

Date	Particulars	Debit	Credit
a.	Benson Capital	$160,000
	To North Capital		$160,000
	(To record sale of interest of Benson to North)
b.	Benson Capital a/c…..dr	$159,000
	To Schmidt Capital a/c		$159,000
	(To record Benson's interest to Schmidt)
c.	Benson Capital a/c……dr	$159,000
	To cash a/c		$159,000
	(To record withdrawal of Benson)
d.	Benson Capital a/c	$159,000
	Meir Capital a/c	$6,333
	Lau capital a/c	$31,667
	To Cash		$197,000
	()
e.	Benson Capital a/c	$159,000
	Accumulated Depreciation a/c	$11,600
	To Meir Capital a/c		$21,100
	To Lau Capital a/c		$105,500
	To Equipment a/c		$32,000
	To Cash a/c		$12,000
Working Notes
d	Gaining Ratio of Meir and Lau	Meir	Benson	Lau
	Old	1	4	5
	New	1		5
	Gaining Ratio of Meir and Lau	1:5
	Meir Capital =	(197000-159,000)*1/6 = $6,333
	Lau Capital =	(197000-159,000)*5/6 = $31,667
e.	Bension is paid $12,000 Cash Plus Equipment recorded on books at $32,000 Less its accumulated Depreciation of $ 1,1600
	Meir Capital =	(159,000-(32,000-11,600+12,000)*1/6 = 21100
	Lau Capital =	(159,000-(32,000-11,600+12,000)*5/6 = 105,500

For Any clarification dont forget to ask.

Thanks