Meir, Benson, and Lau are partners and share income and loss in a 3:2:5 ratio (in percents: Meir, 30%; Benson, 20%; and Lau, 50%). The partnership’s capital balances are as follows: Meir, $168,000; Benson, $138,000; and Lau, $294,000. Benson decides to withdraw from the partnership. Prepare journal entries to record Benson’s February 1 withdrawal under each separate assumption: a. Benson sells her interest to North for $160,000 after North is approved as a partner. b. Benson gives her interest to a son-in-law, Schmidt, and Schmidt is approved as a partner. c. Benson is paid $138,000 in partnership cash for her equity. d. Benson is paid $214,000 in partnership cash for her equity. e. Benson is paid $30,000 in partnership cash plus equipment recorded on the partnership books at $70,000 less its accumulated depreciation of $23,200. Part 2. Assume that Benson does not retire from the partnership described in part 1. Instead, Rhode is admitted to the partnership on February 1 with a 25% equity. Prepare journal entries to record Rhode’s entry into the partnership under each separate assumption: Rhode invests (a) $200,000; (b) $145,000; and (c) $262,000.
Meir, Benson, and Lau are partners and share income and loss in a 3:2:5 ratio (in percents: Meir,
30%; Benson, 20%; and Lau, 50%). The
entries
a. Benson sells her interest to North for $160,000 after North is approved as a partner.
b. Benson gives her interest to a son-in-law, Schmidt, and Schmidt is approved as a partner.
c. Benson is paid $138,000 in partnership cash for her equity.
d. Benson is paid $214,000 in partnership cash for her equity.
e. Benson is paid $30,000 in partnership cash plus equipment recorded on the partnership books at
$70,000 less its accumulated depreciation of $23,200.
Part 2. Assume that Benson does not retire from the partnership described in part 1. Instead, Rhode is admitted
to the partnership on February 1 with a 25% equity. Prepare journal entries to record Rhode’s entry into the
partnership under each separate assumption: Rhode invests (a) $200,000; (b) $145,000; and (c) $262,000.
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