E12.11 (LO 6) AP Julie Lane, Sara Miles, and Amber Noll have capital balances of $50,000, $40,000, and $30,000, respectively. The profit and loss ratio is 5:3:2.

Assume Noll withdraws from the partnership on December 31 of the current year under each of the following independent conditions:

Record withdrawal of partner.

1. Miles agrees to purchase all of Noll's equity by paying $35,000 cash from her personal assets.

2. Noll withdraws $30,000 cash from the partnership.

3. Noll withdraws $35,000 cash from the partnership.

Instructions

a. Journalize the withdrawal of Noll under each of the above assumptions.

b. Determine the balances in the partners' capital accounts and in total partners' equity after Noll has withdrawn, for conditions 1 and 3 above.

Solution:-

A.

	Date	account	Debit	Credit
1	31- Dec	Noll capital A/C	$30000
		Miles capital A/C		$30000
		(To record withdrawal of partner)
2	31- Dec	Noll capital A/C	$30000
		cash		$30000
		(To record withdrawal of partner)
3	31- Dec	Noll capital A/C	$30000
		Julie capital A/C	$3125
		Miles capital A/C	$1875
		cash		$35000
		(To record withdrawal of partner)

b.

The balances in the partners' capital accounts

Condition 1 :-

Miles capital balance $70000

Julie capital balance $50000

Condition 3 :-

Miles capital balance $38125

Julie capital balance $46875