Kazma, Folkert, and Tucker are partners with capital account balances of $30,000, $75,000, and $45,000, respectively. Income

Question:

Kazma, Folkert, and Tucker are partners with capital account balances of $30,000, $75,000, and $45,000, respectively. Income and losses are divided in a 4:4:2 ratio. When Tucker decided to withdraw, the partnership revalued its assets from $225,000 to $252,000, which rep- resented an increase in the value of inventory of $8,000 and an increase in the value of land of $19,000. Tucker was then given $15,000 cash and a note for $40,000 for his withdrawal from the partnership.

Required:
A. Prepare the journal entry to record the revaluation of the partnership’s assets.

B. Prepare the journal entry to record the withdrawal using the following independent methods.

(1) Bonus.

(2) Partial goodwill.

(3) Full goodwill amount.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... 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...