Reference no: EM132488173

Assume the following information just prior to the withdrawal of Partner X:

Assets                                                                      Liabilities

Cash $20,000                                   Accounts payable $ 5,000

Inventory 50,000

Partners' Capital

                                                         X, Capital $10,000

                                                           Y, Capital 20,000

                                                        Z, Capital 35,000 65,000

$70,000                                                          $70,000

Required:

Question 1: Prepare journal entries to record the following unrelated scenarios:

1. Partner X sells his interest to new partner T for $25,000.

2. Partner X sells his interest to partner Y for $30,000.

3. Partner X sells his interest and is paid a share of partnership net assets as follow

Cash $ 5,000

Inventory 5,000

Accounts payable (2,000)

$ 8,000

• Partner Y receives a 60% share of the partnership interest of X. Partner Z receives 40%.