Exercise 1210 Retirement of partner LO P4 Hunter Folgers and

Exercise 12-10 Retirement of partner LO P4 Hunter, Folgers, and Tulip have been partners while sharing net income and loss in a 5:3:2 ratio. On January 31, the date Tulip retires from the partnership, the equities of the partners are Hunter, $370,000; Folgers, $259,000; and Tulip, $185,000. Prepare journal entries to record the retirement of Tulip under the following independent assumptions Assume Tulip is paid $185,000, $205,000, $155,000 for her equity using partnership cash. (Do not round intermediate calculations Round final answer to the nearest whole dollar.) View transaction list

Solution

b) Tulip Capital $ 185,000 Hunter capital ($205,000-$185,000)*5/8) $    12,500 Folgers capital ($205,000-$185,000)*3/8) $      7,500 Cash $ 205,000 c) Tulip Capital $ 185,000 Hunter capital ($185,000-$155,000)*5/8) $    18,750 Folgers capital ($185,000-$155,000)*3/8) $    11,250 Cash $ 155,000