Part 1. Meir, Benson, and Lau are partners and share income and loss in a 3:2:5 ratio. 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, and the partners agree to not have the assets revalued upon Benson’s retirement. Prepare journal entries to record Benson’s February 1 withdrawal from the partnership under each of the following separate assumptions: Benson

(a) sells his interest to North for

$160,000 after Meir and Lau approve the entry of North as a partner;

(b) gives his interest to a son-inlaw, Schmidt, and thereafter Meir and Lau accept Schmidt as a partner;

(c) is paid $138,000 in partnership cash for his equity; (d ) is paid $214,000 in partnership cash for his equity; and

(e) 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, Rhodes is admitted to the partnership on February 1 with a 25% equity. Prepare journal entries to record Rhodes’s entry into the partnership under each of the following separate assumptions: Rhodes invests

(a) $200,000;

(b) $145,000; and

(c) $262,000.

AppendixLO1