Retirement of a Partner
On January 1, 20X1, Eddy decides to retire from the partnership of Cobb, Davis, and Eddy. The partners share profits and losses in the ratio of 3:2:1, respectively. The following condensed balance sheets present the account balances immediately before and, for six independent cases, after Eddy's retirement.
| Balances prior |
| Balances after Eddy's Retirement |
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| to Eddy's |
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Accounts | Retirement | Case 1 | Case 2 | Case 3 | Case 4 | Case 5 | Case 6 |
Assets: |
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Cash | $ 90,000 | $ 10,000 | $ 16,000 | $ 25,000 | $ 16,000 | $ 50,000 | $ 90,000 |
Other Assets | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | 220,000 | 200,000 |
G oodwill | 10,000 | 10,000 | 14,000 | 10,000 | 34,000 | 10,000 | 10,000 |
Total Assets | $300,000 | $220,000 | $230,000 | $235,000 | $250,000 | $280,000 | $300,000 |
Liabilities and Capital: |
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Liabilities | $ 60,000 | $ 60,000 | $ 60,000 | $ 60,000 | $ 60,000 | $ 60,000 | $ 60,000 |
Cobb, Capital | 80,000 | 74,000 | 80,000 | 83,000 | 92,000 | 110,000 | 80,000 |
Davis, Capital | 90,000 | 86,000 | 90,000 | 92,000 | 98,000 | 110,000 | 160,000 |
Eddy, Capital | 70,000 | -0- | -0- | -0- | -0- | -0- | -0- |
Total Liabilities and Capital | $300,000 | $220,000 | $230,000 | $235,000 | $250,000 | $280,000 | $300,000 |
Prepare the necessary journal entries to record Eddy's retirement from the partnership for each of the six independent cases.
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