Ajax Architects is a partnership with three partners. On January 31, 2014, the three partners, Tova Radzik,

Question:

Ajax Architects is a with three partners. On January 31, 2014, the three partners, Tova Radzik, Sela Kopel, and Etti Falkenberg, have capital balances of $98,000, $79,000, and $47,000, respectively. The profit and loss ratio is 4:3:1. On February 1, 2014, Radzik withdraws from the and they agree to pay her $90,000 cash from the assets.
After Radzik leaves, Kopel and Falkenberg agree to a 2:1 profit ratio. During the year ended January 31, 2015, the earns profit of $45,000. Neither Kopel nor Falkenberg makes any withdrawals because the is short of cash aft er paying Radzik. On March 1, 2015, Kopel and Falkenberg agree to admit Devra Malkin to the with a 45% interest for $110,000 cash. Aft er Malkin is admitted, the new profit ratio will be 4:2:5 for Kopel, Falkenberg, and Malkin, respectively.
Instructions
(a) Journalize the withdrawal of Radzik from the What are the balances in Kopel's and Falkenberg's capital accounts aft er Radzik leaves the Prepare the journal entry to close the income summary account on January 31, 2015.
(d) What is the total capital on February 1, 2015, prior to admitting Malkin?
(e) Prepare the journal entry to record the admission of Malkin into the What is the balance in each of the partners' capital accounts after Malkin is admitted to the It Further
Why might a partner who is withdrawing from a agree to a cash payment
that results in a bonus to the remaining partners?
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...