Question
Required information [The following information applies to the questions displayed below.] The partnership of Ace, Jack, and Spade has been in business for 25 years.
Required information
[The following information applies to the questions displayed below.] The partnership of Ace, Jack, and Spade has been in business for 25 years. On December 31, 20X5, Spade decided to retire. The partnership balance sheet reported the following capital balances for each partner at December 31, 20X5:
Ace, Capital | $ | 150,600 | |
Jack, Capital | 201,000 | ||
Spade, Capital | 120,900 | ||
The partners allocate partnership income and loss in the ratio 20:30:50, respectively. Required: Record Spades withdrawal under each of the following independent situations.
a. Jack acquired Spades capital interest for $150,700 in a personal transaction. Partnership assets were not revalued, and partnership goodwill was not recognized.
b. Jack acquired Spades capital interest for $150,700 in a personal transaction. Partnership assets were not revalued, and partnership goodwill applicable to the entire business was recognized by the partnership.
1. Record the recognition of goodwill and the allocation to the partners.
2. Record the transfer of capital.
c. Spade received $180,300 of partnership cash upon retirement. Capital of the partnership after Spades retirement was $292,200.
d. Spade received $61,400 of cash and partnership land with a fair value of $120,800. The carrying amount of the land on the partnership books was $101,300. Capital of the partnership after Spades retirement was $309,800.
1. Record the revaluation of land.
2. Record the payment of cash and land to Spade upon his retirement.
e. Spade received $150,500 of partnership cash upon retirement. The partnership recorded the portion of goodwill attributable to Spade.
f. Spade received $150,500 of partnership cash upon retirement. The partnership goodwill attributable to all the partners was recorded.
g. Because of limited cash in the partnership, Spade received land with a fair value of $101,700 and a partnership note payable for $50,600. The lands carrying amount on the partnership books was $61,400. Capital of the partnership after Spades retirement was $360,500.
1. Record the revaluation of land.
2. Record the settlement of Spade's share by giving land and notes payable.
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