Question
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
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 | $ | 150,700 | |
Jack, Capital | 201,500 | ||
Spade, Capital | 120,800 | ||
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 $151,200 in a personal transaction. Partnership assets were not revalued, and partnership goodwill was not recognized. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Record Spade's capital interest that was acquired in a personal transaction with Jack.
b. Jack acquired Spades capital interest for $151,200 in a personal transaction. Partnership assets were not revalued, and partnership goodwill applicable to the entire business was recognized by the partnership. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Record the recognition of goodwill and the allocation to the partners.
Record the transfer of capital.
c. Spade received $181,600 of partnership cash upon retirement. Capital of the partnership after Spades retirement was $291,400.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Record the payment of the bonus to Spade upon his retirement.
d. Spade received $61,900 of cash and partnership land with a fair value of $120,400. The carrying amount of the land on the partnership books was $100,800. Capital of the partnership after Spades retirement was $310,300. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Record the revaluation of land.
Record the payment of cash and land to Spade upon his retirement.
e. Spade received $151,100 of partnership cash upon retirement. The partnership recorded the portion of goodwill attributable to Spade. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Record the payment of $151,100 upon retirement to Spade and the recognition of goodwill.
f. Spade received $151,100 of partnership cash upon retirement. The partnership goodwill attributable to all the partners was recorded. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Record the recognition of goodwill for the entire firm upon Spade's retirement.
Record the payment of the bonus to Spade upon his retirement.
g. Because of limited cash in the partnership, Spade received land with a fair value of $101,800 and a partnership note payable for $50,700. The lands carrying amount on the partnership books was $60,600. Capital of the partnership after Spades retirement was $361,700. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Record the revaluation of land.
Record the settlement of Spade's share by giving land and notes payable.
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