Cummings and Stickel Construction Company, a partnership, is operating a general contracting business. Ownership of the company is divided among the partners, Katie Cummings, Julie Stickel, Roy Hewson, and Patricia Weber. Profits and losses are shared equally. The books are kept on the calendar-year basis.

On August 10, after the business had been in operation for several years, Patricia Weber passed away. Mr. Weber wished to sell his wifes interest for $30,000. After the books were closed, the partners capital accounts had credit balances as follows:

Katie Cummings	$90,000
Julie Stickel	60,000
Roy Hewson	50,000
Patricia Weber	40,000

Required:

1.	Prepare the general journal entry required to enter the check issued to Mr. Weber in payment of his deceased wifes interest in the partnership. According to the partnership agreement, the difference between the amount paid to Mr. Weber and the book value of Patricia Webers capital account is allocated to the remaining partners based on their ending capital account balances.
2.	Assume instead that Mr. Weber is paid $60,000 for the book value of Patricia Webers capital account. Prepare the necessary journal entry.
3.	Assume instead that Julie Stickel (with the consent of the remaining partners) purchased Webers interest for $70,000 and gave Mr. Weber a personal check for that amount. Prepare the general journal entry for the partnership only.

CHART OF ACCOUNTS

Cummings and Stickel Construction Company

General Ledger

	ASSETS
101	Cash
122	Accounts Receivable
122.1	Allowance for Bad Debts
131	Merchandise Inventory
142	Supplies
181	Store Equipment
182	Office Equipment
189	Accumulated Depreciation

	LIABILITIES
202	Accounts Payable
219	Wages Payable

	EQUITY
311	Patricia Weber, Capital
312	Patricia Weber, Drawing
321	Katie Cummings, Capital
322	Katie Cummings, Drawing
331	Julie Stickel, Capital
332	Julie Stickel, Drawing
341	Roy Hewson, Capital
342	Roy Hewson, Drawing
399	Income Summary

	REVENUE
401	Sales
416	Gain on Sale of Assets

	EXPENSES
511	Wages Expense
521	Rent Expense
523	Supplies Expense
533	Utilities Expense
535	Insurance Expense
541	Depreciation Expense
549	Miscellaneous Expense
616	Loss on Sale of Assets

Prepare the general journal entry required to enter the check issued to Mr. Weber in payment of his deceased wifes interest in the partnership. According to the partnership agreement, the difference between the amount paid to Mr. Weber and the book value of Patricia Webers capital account is allocated to the remaining partners based on their ending capital account balances.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5

2. Assume instead that Mr. Weber is paid $60,000 for the book value of Patricia Webers capital account. Prepare the necessary journal entry.

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5

3. Assume instead that Julie Stickel (with the consent of the remaining partners) purchased Webers interest for $70,000 and gave Mr. Weber a personal check for that amount. Prepare the general journal entry for the partnership only.

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2