on for ACCT 211ACCT211NO3201 of pter 12 H Problems 6 10 Requ

on for ACCT 211-ACCT-211-NO3-201 of pter 12 H Problems 6 10 Required information The following information applies to the questions displayed below) Meir, Benson, and Lau are partners and share income and loss in a 3:2:5 ratio. The partnership\'s capital balances are as follows: Meir, $168,000; Benson, $138,000: and Lau, $294,000. Benson decides to withdraw from the partnership, and the partners agree not to have the assets revalued upon Benson\'s retirement (Do not round intermediate calculations.) Benson (a) selis her interest to North for $160.,000 after Meir and Lau approve the entry of North as a partner: (b) gives her interest to a son-in law, Schmidt, and thereafter Meir and Lau accept Schmidt as a partner, ( is paid $138,000 in partnership cash for her equity: ( is paid $214,000 in partnership cash for her equity; and (e) is paid $30,000 in partnership cash plus equipment recorded on the partnership books at $70,000 less its accumulated depreciation of $23,200 Debitc 138.000 138 Capital

Solution

Journal entries in the books of partnership business:

A) Benson\'s capital account ............................Dr. $138000

To North\'s capital account ..........................................$138000.

(Being Benson\'s capital is sold to North.)

B) Benson\'s capital account ............................Dr. $138000

To Schmidt\'s capital account ..........................................$138000.

(Being Benson\'s capital is transferred to Schmidt.)

C) Benson\'s capital account ............................Dr. $138000

To Cash account ..........................................$138000.

(Being Benson\'s share in capital is paid through cash .)

D) Benson\'s capital account ............................Dr. $138000

Goodwill account ........................................Dr. $76000

To North\'s capital account ..........................................$214000.

(Being Benson is paid for his share of capital and goodwill.)

If Reserve/ profit balance is there then there will be one more journal entry:

Reserve/ profit account ......................Dr. 76000

To Goodwill account.................................76000.

E) Benson\'s capital account ............................Dr. $138000

To cash account..........................................................$30000

To Equipment account (70000 - 23200)......................$46800

To Capital reserve account (Bal fig.)..........................$61200.

(Being Benson\'s capital is paid with cash, equipment and balance is transferred to capital reserve account.)

(Being Benson\'s capital is sold to North.)