Chapter 14 Review Questions Use the following information for the next THREE items ABC Partnership had the following information on January 1st, 2015 Percentage Interest in Existing Partners Capital Balance Capital Profit A $60,000 50% 2 B 30,000 25 2 30,000 25 1 On that date, Partner C decided to withdraw from the partnership. Answer the following independent cases. 7. Assume that Partner B uses $22,000 of her personal funds to purchase Partner C's interest in the partnership 9 . Assume that Partner C sells her interest to the Partnership for $32,000. Using the goodwill method, what in a private transaction. How would this transaction be recorded by the partnership? would be the goodwill traceable to the entire Partnership and Partner A's share of that goodwill, respectively? Entire Partnership A's Share a. Debit B-Capital $22,000, Credit C-Capital $22,000. . Debit C-Capital $22,000, Credit B-Capital $22,000. Entire partnership: A's Share: C. Debit C-Capital $30,000, Credit B-Capital $30,000. ANSWER: C $8,000 $4,000 d. Debit B-Capital $30,000, Credit C-Capital $30,000. b Entire partnership: A's Share: 8. Assume that Partner C sells her interest to the partnership for $25,000. How would this transaction be $8,000 $3,200 recorded using the bonus method: C. Entire partnership: A's Share: ANSWER: C a. Debit C-Capital $30,000, Credit A-Capital $20,000, Credit B-Capital $10,000. $10,000 $4,000 b. Debit C-Capital $30,000, Credit A-Capital $15,000, Credit B-Capital $15,000. c. Debit C-Capital $30,000, Credit Cash $25,000, Credit A-Capital $2,500, Credit B-Capital $2,500. d. Entire partnership: A's Share: d. Debit C-Capital $25,000, Credit Cash $25,000. $10,000 $5,000 ANSWER: C