Retirement: Bonus and Goodwill Calculations

Ellery Stevens, senior partner in a rapidly growing local CPA firm, has decided to retire. His share in the firms profits and losses is 25 percent and his capital account has a balance of $180,000. Total capital of the firm is $800,000. Under the partnership agreement, Stevens will receive $300,000 upon retirement.

c. Calculate the amount of goodwill recognized if the total goodwill approach is used. Prepare the journal entries to record Stevens retirement using the total goodwill approach.

Having a hard time figuring out the rest of the answers please help

Required a. Calculate the bonus to Stevens and the total capital of the firm after Stevens' retirement. Amount Stevens' bonus $ 120,000 Total capital of firm after Stevens' retirement $ 0 x b. Prepare the journal entries to record Stevens' retirement, if the partial goodwill approach is used. Description Debit Credit Goodwill 0 Stevens, Capital 0 0 x To record partial goodwill. Stevens, Capital 300,000 Cash 0 ~ 300,000 V To record retirement payment to Stevens. Debit Ox ov Credit 0 120,000 or Description Goodwill Stevens, Capital Other partners, Capital To record total goodwill. Stevens, Capital Cash To record retirement payment to Stevens. O 300,000 V 0 v 300,000