Question

Gale, McLean, and Lux are partners of Burgers and Brew Company with capital balances as follows: Gale, $93,000; McLean, $87,000; and Lux, $156,000. The partners share profit and losses in a 3:2:5 ratio. McLean decides to withdraw from the partnership. Prepare General Journal entries to record the May 1, 2020, withdrawal of McLean from the partnership under each of the following unrelated assumptions:

a. McLean sells his interest to Freedman for $177,000 after Gale and Lux approve the entry of Freedman as a partner (where McLean receives the cash personally from Freedman).

b. McLean gives his interest to a son-in-law, Park. Gale and Lux accept Park as a partner.

c. McLean is paid $87,000 in partnership cash for his equity.

d. McLean is paid $141,000 in partnership cash for his equity.

e. McLean is paid $36,250 in partnership cash plus machinery that is recorded on the partnership books at $124,000 less accumulated depreciation of $92,000. (Round final answers to 2 decimal places.)

Answer 1

Credit (6) Debit($) $87,000 . $87,000 solutions Journal Entries Event Date General Journal (a) 2020 Mclean, capital.. May 1 Freedman, Capital (to record admiassion of freedman) I (b) hay ý Mclean, capital park;. capital (to recová admission of park) (6) may 1... McLean, capital cash (to record withdrawl of Mclean with no bonus) $87,000 $87,000 .. $87,000 $87,000

E (6) Maya Mclean, capital $87,000 Gale, capital($141,000-$87,000)x 318 $20,250 Luxe; capital (5141,000-$87,000)*518 $33,150 cash (to record withdrawl of Me Lean with bonus) $1411000 . - May 1 Mclean, capital . . . $87,000 Accumulated Depreciation, Machinery $92,000 Gale, capital ($ 18,7504x318) $7031.25 Luxe, Capital ($18750*518) $11,718.75 Machinery $124,000 cash . $36,250 (to record withdrawl of McLean with bonus to old partners) Explanations ☆ -> $87,000 + $92,000 -($120,000 +$36,250) = $18.750. SEN

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