2017 

Jun. 10 Steven Hodgson and Sarah Asham have agreed to pool their assets and form a partnership to be called H&A Distributors. They agree to share all profits equally and make the following initial investments:

Dec. 31 The partnership’s reported net income was $228,000 for the year. 

2018 

Jan. 1 Hodgson and Asham agree to accept Myra Sirroca into the partnership with a $210,000 investment for 40 percent of the business. The partnership agreement is amended to provide for the following sharing of profits and losses:

Dec. 31 The partnership’s reported net income is $570,000. 

2019 

Oct. 10 Hodgson withdrew $90,000 cash from the partnership and Asham withdrew $60,000 (Sirroca did not make any withdrawals). 

Dec. 31 The partnership’s reported net income is $225,000.

2020 

Jan. 2 After a disagreement as to the direction in which the partnership should be moving, Sirroca decided to withdraw from the partnership. The three partners agreed that Sirroca could take cash of $510,000 in exchange for her equity in the partnership.

Required

1. Journalize all of the transactions for the partnership.

2. Prepare the partners’ equity section of the balance sheet as of January 2, 2020.

Transcribed Image Text:

Hodgson Asham Cash.. $21,000 $36,000 Accounts receivable (net).. 42,000 21,000 Office furniture (net).. 48,000 27,000