Acc280 Financial Accounting: P12-5A On December 31, the capital balances and income ratios in FAD

Acc280 Financial Accounting

P12-5A
On December 31, the capital balances and income ratios in FAD Company are as follows.
Partner Capital Balance Income Ratio
J. Fagan 60,000 50%
P. Ames 40,000 30%
K. Durham 26,000 20%

Instructions:
a. Journalize the withdrawal of Durham under each of the following assumptions.
1. Each of the continuing partners agrees to pay $18,000 in cash from personal funds to purchase Durham's ownership equity. Each receives 50% of Durham's equity.
2. Ames agrees to purchase Durham's ownership interest for $25,000 cash.
3. Durham is paid $34,000 from partnership assets, which includes a bonus to the retiring partner.partner.
4. Durham is paid $22,000 from partnership assets, and bonuses to the remaining partners are recognized.
b. If Ames's capital balance after Durham's withdrawal is $42,400 what were (1) the total bonus to the remaining partners and (2) the cash paid by the partnership to Durham
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