Homework Help is Here – Start Your Trial Now!
Business
Accounting
ndraw from the partnership, le nt, when a partner withdraws ndent appraiser. The withdraw ng an appropriate share of an he regular profit and loss per

ndraw from the partnership, le nt, when a partner withdraws ndent appraiser. The withdraw ng an appropriate share of an he regular profit and loss per

SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 38P
See similar textbooks
icon
Related questions
Question
The partnership of Matteson, Richton, and O'Toole has existed for a number of years. At the present time, the partners have the following capital balances and profit and loss sharing percentages: Partner Matteson Richton O'Toole Capital Balance $ 143,550 O'Toole elects to withdraw from the partnership, leaving Matteson and Richton to operate the business. Following the original partnership agreement, when a partner withdraws, the partnership and all of its individual assets are to be reassessed to current fair values by an independent appraiser. The withdrawing partner will receive cash or other assets equal to that partner's current capital balance after including an appropriate share of any adjustment indicated by the appraisal. Gains and losses indicated by the appraisal are allocated using the regular profit and loss percentages. 186,450 170,000 An independent appraiser is hired and estimates that the partnership as a whole is worth $530,000. Regarding the individual assets, the appraiser finds that a building with a book value of $250,000 has a fair value of $360,000. The book values for all other identifiable assets and liabilities are the same as their appraised fair values. View transaction list Accordingly, the partnership agrees to pay O'Toole $260,000 upon withdrawal. Matteson and Richton, however, do not wish to record any goodwill in connection with the change in ownership. 1 Prepare the journal entry to record O'Toole's withdrawal from the partnership. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.) Profit and Loss Percentage 30% 50 20 Journal entry worksheet Transaction 1 2 Note: Enter debits before credits. Record the building appreciation to old partners. Record entry General Journal Clear entry Debit Credit View general journal View transaction list Journal entry worksheet < 1 2 Record O'Toole's withdrawal from the partnership. Note: Enter debits before credits. Transaction 2 Record entry General Journal Clear entry Debit Credit View general journal >
Transcribed Image Text:The partnership of Matteson, Richton, and O'Toole has existed for a number of years. At the present time, the partners have the following capital balances and profit and loss sharing percentages: Partner Matteson Richton O'Toole Capital Balance $ 143,550 O'Toole elects to withdraw from the partnership, leaving Matteson and Richton to operate the business. Following the original partnership agreement, when a partner withdraws, the partnership and all of its individual assets are to be reassessed to current fair values by an independent appraiser. The withdrawing partner will receive cash or other assets equal to that partner's current capital balance after including an appropriate share of any adjustment indicated by the appraisal. Gains and losses indicated by the appraisal are allocated using the regular profit and loss percentages. 186,450 170,000 An independent appraiser is hired and estimates that the partnership as a whole is worth $530,000. Regarding the individual assets, the appraiser finds that a building with a book value of $250,000 has a fair value of $360,000. The book values for all other identifiable assets and liabilities are the same as their appraised fair values. View transaction list Accordingly, the partnership agrees to pay O'Toole $260,000 upon withdrawal. Matteson and Richton, however, do not wish to record any goodwill in connection with the change in ownership. 1 Prepare the journal entry to record O'Toole's withdrawal from the partnership. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.) Profit and Loss Percentage 30% 50 20 Journal entry worksheet Transaction 1 2 Note: Enter debits before credits. Record the building appreciation to old partners. Record entry General Journal Clear entry Debit Credit View general journal View transaction list Journal entry worksheet < 1 2 Record O'Toole's withdrawal from the partnership. Note: Enter debits before credits. Transaction 2 Record entry General Journal Clear entry Debit Credit View general journal >
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Partners and Partnerships
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage
SWFT Corp Partner Estates Trusts
SWFT Corp Partner Estates Trusts
Accounting
ISBN:
9780357161548
Author:
Raabe
Publisher:
Cengage
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
SEE MORE TEXTBOOKS