In: Accounting
he following information applies to the questions displayed
below.]
Meir, Benson, and Lau are partners and share income and loss in a
2:3:5 ratio (in percents: Meir, 20%; Benson, 30%; and Lau, 50%).
The partnership's capital balances are as follows: Meir, $58,000;
Benson, $89,000; and Lau, $153,000. Benson decides to withdraw from
the partnership.
1. Prepare the journal entry to record Benson's
withdrawal under each independent assumptions. (Do not
round intermediate calculations.)
(a) Benson sells her interest to North for $160,000 after
North is approved as a partner; (b) Benson gives her
interest to a son-in-law, Schmidt, and Schmidt is approved as a
partner; (c) Benson is paid $89,000 in partnership cash
for her equity; (d) Benson is paid $127,000 in partnership
cash for her equity; and (e) Benson is paid $12,500 in
partnership cash plus equipment recorded on the partnership books
at $32,500 less its accumulated depreciation of $11,600
b Assume that Benson does not retire from the partnership
described in Part 1. Instead, Rhode is admitted to the partnership
on February 1 with a 25% equity. Prepare journal entries to record
Rhode’s entry into the partnership under each separate assumption:
Rhode invests (a) $100,000; (b) $73,000; and
(c) $131,000. (Do not round your intermediate
calculations.)