A balance sheet at December 31, 2011, for the Bec, Dee, and Lyn partnership is summarized as follows:
Assets | $800,000 | Liabilities | $200,000 |
Loan to Dee | 100,000 | Bec capital (50%) | 300,000 |
| $900,000 | Dee capital (40%) | 300,000 |
|
| Lyn capital (10%) | 100,000 |
|
|
| $900,000 |
Dee is retiring from the partnership. The partners agree that partnership assets, excluding Dee’s loan, should be adjusted to their fair value of $1,000,000 and that Dee should receive $310,000 for her capital balance net of the $100,000 loan. The bonus approach is used; therefore, no goodwill is recorded.
REQUIRED: Determine the capital balances of Bec and Lyn immediately after Dee’s retirement.
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