Question

Problem 12-05A a-b (Part Level Submission) On December 31, the capital balances and income ratios in Sheridan Company are as follows. Partner Capital Balance Income Ratio Trayer Emig Posada $59,500 35,500 30,500 50% 30% 20% (a) Journalize the withdrawal of Posada under each of the following assumptions. (Credit account titles are automatically indented when amour indent manually.) (1) Each of the continuing partners agrees to pay $18,600 in cash from personal funds to purchase Posada's ownership equity. Each receives 50% (2) Emig agrees to purchase Posada's ownership interest for $23,000 cash. (3) Posada is paid $34,100 from partnership assets, which includes a bonus to the retiring partner. (4) Posada is paid $20,980 from partnership assets, and bonuses to the remaining partners are recognized. No. Account Titles and Explanation Debit Credit Posada, Capital 30500 Trayer, Capital 15250 Emig, Capital 15250 2. Policy. Posada, Capital 2000-2020 John Wiley 30500 Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc.

Answer 1

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No	Accounts Title	Debit	Credit
1	Posada Capital	$ 30,500
	Trayer Capital ($30,500*50%)		$ 15,250
	Emig Capital ($30,500*50%)		$ 15,250
2	Posada Capital	$ 30,500
	Emig Capital		$ 30,500
3	Posada Capital	$ 30,500
	Trayer Capital [($34,100-$30,500)*5/8]	$    2,250
	Emig Capital [($34,100-$30,500)*3/8]	$    1,350
	Cash		$ 34,100
4	Posada Capital	$ 30,500
	Trayer Capital [($30,500-$20,980)*5/8]		$    5,950
	Emig Capital [($30,500-$20,980)*3/8]		$    3,570
	Cash		$ 20,980