Question

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Required information Problem 12-5A Partner withdrawal and admission LO P3, P4 [The following information applies to the questions displayed below.) Meir, Benson, and Lau are partners and share income and loss in a 3.2:5 ratio (in percents: Meir, 30%; Benson, 20%, and Lau, 50%). The partnership's capital balances are as follows: Meir, $118,000; Benson, $79,000, and Lau, $203,000. Benson decides to withdraw from the partnership. Problem 12-5A Part 1 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 $79,000 in partnership cash for her equity; (d) Benson is paid $117,000 in partnership cash for her equity, and (e) Benson is paid $15,500 in partnership cash plus equipment recorded on the partnership books at $35,500 less its accumulated depreciation of $11,600.

Answer 1

Transation Credit Debit 160,000 General Journal Benson Capital North Capital (To record saleof interest to North) 15 16 a 17 18 19 20 b 21 160,000 79,000 Benson Capital Schmidt Capital (To record saleof interest to his son in law) 79,000 22 79,000 Benson Capital Cash (To record payment made to Benson) 25 26 79,000 Benson Capital Meir Capital (117000-79000)*3/8 Lau Capital (117000-79000)*5/8 Cash (To record payment made to Benson) 79,000 14,250 23,750 117,000

79,000 11,600 Benson Capital Accumulated Depreciation Meir Capital (79000+1 1600-35500-15500)*3/8 Lau Capital (79000+11600-36000-16000)*5/8 Equipment Cash (To record payment made to Benson) 14,850 24,750 35,500 15,500 or it can also be done in this way 79,000 Benson Capital Meir Capital (79000-23900-15500)*3/8 Lau Capital (79000-23900-15500)*5/8 Equipment (35500-11600) Cash (To record payment made to Benson) 14,850 24,750 23,900 15,500 Note; As per rule I have answered the first question with all parts