Lambert, Ray, and Verlander are partners. On July 30, 201X, the balance sheet was as follows: The

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Lambert, Ray, and Verlander are partners. On July 30, 201X, the balance sheet was as follows:

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The partners agree to share all losses and gains in a 2:2:1 ratio. Verlander is withdrawing from the partnership. From the following independent situations, journalize the withdrawal of Verlander.

Situation 1: Verlander sells his equity to Jennings for $18,400. Partners agree to admission of Jennings.

Situation 2: On withdrawal of Verlander, inventory is determined to be overvalued by $1,000. (Before withdrawal, assets are revalued to current fair market value.) Be sure to record entry to revalue inventory as well as the withdrawal of Verlander.

Situation 3: Verlander is paid $3,800 out of the assets of the partnership. The partners do not want to change the recorded asset values.

Situation 4: Verlander is paid $9,000 out of the assets of the partnership. The partners do not want to change the recorded asset values.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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College Accounting A Practical Approach

ISBN: 9780134729312

14th Edition

Authors: Jeffrey Slater, Mike Deschamps

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