Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A summary balance sheet for the Akerly, Baskin, and Crow partnership on December 31, 2014 is shown below. Partners Akerly, Baskin, and Crow allocate profit

A summary balance sheet for the Akerly, Baskin, and Crow partnership on December 31, 2014 is shown below. Partners Akerly, Baskin, and Crow allocate profit and loss in their respective ratios of 3:2:1. The partnership agreed to pay partner Baskin $500,000 for his partnership interest upon his retirement from the partnership on January 1, 2015. The partnership financials on January 1, 2015 are:

Assets

Cash $ 70,000

Marketable securities 190,000

Inventory 360,000

Land 110,000

Building-net 570,000

Total assets $1,300,000

Equities

Akerly, capital $630,000

Baskin, capital 420,000

Crow, capital 250,000

Total equities $1,300,000

Required:

Prepare the journal entry to reflect Baskin's retirement from the partnership:

1. Assuming a bonus to Baskin.

2. Assuming a revaluation of total partnership capital based on excess payment.

3. Assuming goodwill equal to the excess payment is recorded

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Application Of Quantitative Techniques For The Prediction Of Bank Acquisition Targets

Authors: Pasiouras Fotios

1st Edition

9812565183, 9789812565181

More Books

Students also viewed these Accounting questions