For National Co., beginning capital balances on January 1, 2020, are Nancy Payne $20,000 and Ann Dody $18,000. During the year, drawings were Payne $8,000 and Dody $5,000. Net income was $40,000, and the partners share income equally.
Instructions
- Prepare the partners capital statement for the year.
- Prepare the owners equity section of the balance sheet at December 31, 2020.
Terry, Nick, and Frank are forming the Doctor Partnership. Terry is transferring $30,000 of personal cash and equipment worth $25,000 to the partnership. Nick owns land worth $28,000 and a small building worth $75,000, which he transfers to the partnership. There is a long term mortgage of $20,000 on the land and building. which the partnership assumes. Frank transfers cash of $7,000, accounts receivable of $36,000, supplies worth $3,000, and equipment worth $27,000 to their partnership. the partnership expects to collect $32,000 of the accounts receivable.
Instructions
Prepare a classified balance sheet for the partnership after the partners' investments on December 31, 2020.
Sedgwick Company at December 31 has cash $20,000, noncash assets $100,000, liabilities $55,000, and the following capital balances: Floyd $45,000 and DeWitt $20,000. the firm is liquidated, and $105,000 in cash is received for the noncash assets. Floyd and DeWitt income ratios are 60% and 40%, respectively.
Instructions
Prepare a schedule of cash payments
Data for Sedgwick Company are presented bellow.
At December 31, Sedqwick Company has cash $20,000, noncash assets $100,000, liabilities $55,00, and the following capital balances:Floyd $45,000 and DeWitt $20,000. the firm is liquidated, and $105,000 in cash is received for the noncash assets. Floyd and DeWitt income ratios are 60% and 40%, respectively. Sedgwick Company now decides to liquidate the partnership.
Instructions
Prepare the entries to record:
- The sale of noncash assets.
- The allocation of the gain or loss on realization to the partners.
- Payment of creditors.
- Distribution of cash to the partners.
Prior to the distribution of cash to the partners, the accounts in the VUP company are Cash $24,000; Vogel Capital (Cr.) $17,000; Utech, Capital (Cr.) $15,000; and Pens, Capital (Dr.) $8,000. The income ratios are 5:3:2, respectively. VUP Company decides to liquidate the company.
Instructions
- Prepare the entry to record (1) Pena's payment of $8,000 in cash to the partnership and (2) the distribution of cash to the partners with credit balances.
- Prepare the entry to record (1) the absorption of Pena's capital deficiency bye the other partners and (2) the distribution of cash to the partners with credit balances.
K.Kolmer, C Eidman, and C. Ryno share income on a 5:3:2 basis. They have capital balances of $34,000, $26,000, and $21,000, respectively, when Don Jernigan is admitted to the partnership.
Instructions
Prepare the journal entry to record the admission of Don Jernigan under each of the following assumptions.
- Purchase of 50% of Kolmer's equity for $19,000.
- Purchase of 50% of Eidman's equity for $12,000.
- Purchase of 33 1/3% of Ryno's equity for $9,000
S. Pagan and T. Tabor share income on a 6:4 basis. They have capital balances of $100,000 and $60,000, respectively, when Wolford is admitted to the partnership.
Instructions
Prepare the journal entry to record the admission of W. Wolford under each of the following assumptions
- Investment of $90,000 cash for a 30% ownership interest with bonuses to the existing partners.
- Investment of $50,000 cash for a 30% ownership interest with bonuses to the new partner.
N. Essex, Cgilmore, and C. Heganbart have capital balances of $50,000, $50,000, and $30,000 respectively. Their income ratios are 4:4:2. Heganbart withdraws from the partnership under each of the following independent conditions.
- Essex and Gillmore agree to purchase Heganbart's equity by paying $17,000 each from their personal assets. Each purchaser receives 50% of Heganbar's equity.
- Gillmore agrees to purchase all of heganbart's equity by paying $22,000 cash from here personal assets.
- Essex agrees to purchase all of Heganbart's equity by paying $26,000 cash from his personal assets.
Instructions
Journalize the withdrawal of Heganbart under each of the assumptions above.
B. Higgins, J. Mayo, and N. rice have capital balances of $95,000, $75,000, and $60,000 respectively. they share income or loss on a 5:3:2 basis. Rice withdrawn from the partnership under each of the following conditions.
- rice is paid $64,000 in cash from partnership assets, and a bonus is granted to the retiring partner.
- rice is paid $52,000 in cash from partnership assets, and bonuses are granted tot he remaining partners.
Instructions
Journalize the withdrawal of Rice under each of the assumptions above.
Foss, Albertson, and Espinosa are partners who share profits and losses 50%, 30% and 20% respectively. There capital balances are $100,000, $60,000, and $40,000 respectively.
Instructions
- Assume Garrett joins the partnership by investing $88,000 for a 25% interest with bonuses to the existing partners. Prepare the journal entry to record his investment.
- Assume instead that Foss leaves the partnership. Foss is paid $110,000 with a bonus to the retiring partner. Prepare the journal entry to record Foss's withdrawal.