Reference no: EM133327627

Accounting for Partnerships

1. The capital balances of the partners in DEB Co. are M. Ditka $40,000; E. Embs $30,000; and B. Boyd $20,000. The partners share income equally. Boyd decides that he is going to leave the partnership. Ditka and Embs each agree to pay Boyd $12,000 from their personal assets to each receive 50% of Boyd's equity. 

1. Journalize the withdrawal of Boyd on December 31 of the current year. 
2. Instead of payment from personal assets, assume that Boyd receives $24,000 from partnership assets in withdrawing from the partnership. Journalize the withdrawal of Boyd on December 31. c) Also journalize entry if Boyd received $16,000 cash instead of $24,000.  

2. On November 15 of the current year, the account balances in Greenscape Partnership were Cash $5,000; Other assets $12,000; D. Dupuis, Capital $9,000; V. Dueck, Capital $6,000; and B. Veitch, Capital $2,000. The three partners share income and losses equally. The other assets are sold for $15,000 cash. Prepare journal entries to a) record the sale of the other assets, b) distribute any resulting gain or loss to the capital accounts, and c) record the final distribution of cash to the partners. d) Assume that the other assets were sold for $9,000 cash instead of $15,000. Repeat questions a), b), and c).

3. Before the distribution of cash to the partners on September 30 of the current year, the accounts in MEL Company are as follows: Cash $31, 000; M. McDonald, Capital $18,000 (Cr.); J. El Bayouni, Capital $16, 000 (Cr.); and G. Lodge, Capital $3,000 (Dr.). The income ratios are 5:3:2:, respectively. 

1. Assume Lodge repays his capital deficiency, prepare the entry on September 30 to record 1) Lodge's payment of $3, 000 in cash to the partnership, and 2) the distribution of cash to the partners
2. Assuming Lodge is not able to repay his capital deficiency, prepare the entry on September 30 to record 1) the absorption of Lodge's capital deficiency by the other partners, and 2) the distribution of cash to the partners

4. T. Halo, K. Rose, and J. Lamp share income on a 5:3:2 basis, respectively. They have capital balances of $32,000, $26,000, and $15,000, respectively when R. Zahn is admitted to the partnership on July 1 of the current year. Prepare journal entries to record the admission of Dahn under each of the following independents. 

1. Zahn purchases 50% of Halo's equity for $20,000
2. Zahn purchases 50% of Rose's equity for $20,000
3. Zahn purchases 33.33% of Lamp's equity for $10,000