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The partnership of Matteson, Richton, and O'Toole has existed for a number of years. At the present time, the partners have the following capital balances

The partnership of Matteson, Richton, and O'Toole has existed for a number of years. At the present time, the partners have the
following capital balances and profit and loss sharing percentages:
O'Toole elects to withdraw from the partnership, leaving Matteson and Richton to operate the business. Following the original
partnership agreement, when a partner withdraws, the partnership and all of its individual assets are to be reassessed to current fair
values by an independent appraiser. The withdrawing partner will receive cash or other assets equal to that partner's current capital
balance after including an appropriate share of any adjustment indicated by the appraisal. Gains and losses indicated by the appraisal
are allocated using the regular profit and loss percentages.
An independent appraiser is hired and estimates that the partnership as a whole is worth $570,000. Regarding the individual assets,
the appraiser finds that a building with a book value of $270,000 has a fair value of $400,000. The book values for all other
identifiable assets and liabilities are the same as their appraised fair values.
Accordingly, the partnership agrees to pay O'Toole $114,000 upon withdrawal. Matteson and Richton, however, do not wish to record
any goodwill in connection with the change in ownership.
Required:
Prepare the journal entries to record O'Toole's withdrawal from the partnership.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your
intermediate calculations.
Journal entry worksheet
12
Record the building appreciation.
Note: Enter debits before credits.
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