Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Withdrawal of partner Lane Stevens is to retire from the partnership of Stevens and Associates as of March 3 1 , the end of the

Withdrawal of partner
Lane Stevens is to retire from the partnership of Stevens and Associates as of March 31, the end of the current fiscal year. After closing the accounts, the capital balances of the partners are as
follows: Lane Stevens, $250,000; Cherrie Ford, $128,000; and LaMarcus Rollins, $143,000. They have shared net income and net losses in the ratio of 3:2:2. The partners agree that the
inventory should be increased by $23,100, and the allowance for doubtful accounts should be increased by $5,600. Stevens agrees to accept a note for $205,000 in partial settlement of his
ownership equity. The remainder of his claim is to be paid in cash. Ford and Rollins are to share equally in the net income or net loss of the new partnership.
a. Journalize the entry to record the adjustment of the assets to bring them into agreement with current market prices. If an amount box does not require an entry, leave it blank.
Feedback
Check My Work
a. Adjust the inventory account and the allowance account, and adjust each partner's capital account for their income-sharing ratio by multiplying net inventory times 37 for Winner's allocation and 27 time net
inventory for both Richards' and Williams' allocation.
b. Journalize the entry to record the withdrawal of Stevens from the partnership. If an amount box does not require an entry, leave it blank.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Charles T. Horngren, Jr. Harrison, Walter T.

2nd Edition

0133118207, 978-0133118209

More Books

Students also viewed these Accounting questions

Question

12.3 Explain employment termination of various occupational groups.

Answered: 1 week ago

Question

Define outplacement and severance pay.

Answered: 1 week ago

Question

What would you do?

Answered: 1 week ago