Question

Problem 12-5A Partner withdrawal and admission P3 P4 Part 1. 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. $168.000; Benson. $138.000; and Lau, $294,000. Benson decides to withdraw from the partnership. Prepare journal entries to record Benson's February 1 withdrawal under each separate assumption: 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 $138,000 in partnership cash for her equity. d. Benson is paid $214,000 in partnership cash for her equity. e. Benson is paid $30,000 in partnership cash plus equipment recorded on the partnership books at $70.000 less its accumulated depreciation of $23,200. Check t au. Cao Part 2. Assume that Benson does not retire from the partnership described in part 1. Instead, Rhode is admit- ted 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) $200,000; (b) $145,000; and (c) $262.000. 200 Benson Coote 59

part 1 and 2 please

Answer 1

Dart / (a) Benson, Capital North Capitell 160,000 160,000 (6) - 130,000 Benson Capital Schnict, Capital 138000 130,000 o Benson, Capital Cash B8,000 (d) Benson, Capital Mein , Capital Lay, Capital Cash 139000 20,soo 47,500 214,000 -(e) Benson, Capital 130,000 Accumulated Depevciation 23,200 - Equipment Meier Capital hay, Capital Equipment Cart 22950 30,250 70,000 30,000

200,000 200000 Part 2 (e Cash Rhodes Capital 6) Canh 145.000 3 Mein, Capital ($41250X310) 2,375 > Benson, Capital (8 4,250x2/10) 8,250 Lay, Capital ($4,250x 5/10) 20,625 Rhodes Capital A - 186,250 o Carh 262,000 Mein Capital (46,500x3/10) Benson Capital (16 500 x 210). Lay Capital (464500X5110) Rhodes Capital & A 3950 9,300 23,250 Qis,soo Notes $160,000+ $138000+ $294,000 = $600,000 1 600,000+ $200,000)xQ5 = $200,000 Thus, no bonus is deceived a loo 3 paid

* $ 600,000 £$145,000 ) X250 = $186,250 $ 145000 - $186,250 - = $41,250) This a bonus is paid to newe partner (600,000+ 262,000) . $215,500 $262000 - $215, soo e $ 46,50 Thiss old partner execeives bonus