Problem

Capital balances and profit- and loss-sharing ratios for the Nix, Man, and Per partnership...

Capital balances and profit- and loss-sharing ratios for the Nix, Man, and Per partnership on December 31, 2011, just before the retirement of Nix, are as follows:

Nix capital (30%)

$128,000

Man capital (30%)

$140,000

Per capital (40%)

$160,000

On January 2, 2012, Nix is paid $170,000 cash on his retirement.

REQUIRED : Prepare the journal entry or entries to record Nix’s retirement assuming that goodwill, as implied by the payment to Nix, is recorded on the partnership books.

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Solutions For Problems in Chapter 16