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M. Szyslak, B. Gumble and C. Wiggum open a day care centre together. The partners share profits and losses equally and their Capital account balances are as follows: Szyslak $15 000; Gumble $20 000 and Wiggum $25 000.
Problem 1: Prepare the journal entries required under each of the following scenarios:
a) Szyslak leaves the partnership and receives $14 000 in cash from the partnership.b) Szyslak leaves the partnership and receives $16 500 in cash from the partnership.c) Szyslak receives $8 000 from Gumbel and $8 000 from Wiggum. The payments are made in cash from personal funds.
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