Jose, Kiko and Lola share profits and losses in the ratio 5:3:2, respectively. The partners agreed to write-off the prepaid expenses and to adjust the equipment to its fair value of 230,000. Lola is paid 110,000 cash for his total interest. What is the balance of each remaining partner’s account after Lola’s retirement?
Jose, Kiko and Lola share profits and losses in the ratio 5:3:2, respectively. The partners agreed to write-off the prepaid expenses and to adjust the equipment to its fair value of 230,000. Lola is paid 110,000 cash for his total interest. What is the balance of each remaining partner’s account after Lola’s retirement?
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 57P
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Question
- On July 1, 2019, Lola wants to retire from JKL
Partnership . TheStatement of Financial Position of JKL Partnership before closing on that date shows the following:
|
Cash |
148,000 |
|
Receivables, net |
72,000 |
|
Equipment, net |
270,000 |
|
Prepaid expenses |
60,000 |
|
Total assets |
550,000 |
Liabilities |
90,000 |
|
Jose, Capital |
200,000 |
|
Kiko, Capital |
96,000 |
|
Lola, Capital |
84,000 |
|
Income summary |
80,000 |
|
Total liabilities and equity |
550,000 |
Jose, Kiko and Lola share
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