A summary balance sheet for the Akerly, Baskin, and Crow partnership on December 31, 2014 is shown below. Partners Akerly, Baskin, and Crow allocate profit and loss in their respective ratios of 3:2:1. The partnership agreed to pay partner Baskin $500,000 for his partnership interest upon his retirement from the partnership on January 1, 2015. The partnership financials on January 1, 2015 are:
Required:
Prepare the journal entry to reflect Baskin's retirement from the partnership:
1. Assuming a bonus to Baskin.
2. Assuming a revaluation of total partnership capital based on excess payment.
3. Assuming goodwill equal to the excess payment is recorded.

Question

A summary balance sheet for the Akerly, Baskin, and Crow partnership on December 31, 2014 is shown below. Partners Akerly, Baskin, and Crow allocate profit and loss in their respective ratios of 3:2:1. The partnership agreed to pay partner Baskin $500,000 for his partnership interest upon his retirement from the partnership on January 1, 2015. The partnership financials on January 1, 2015 are:
  Required:
Prepare the journal entry to reflect Baskin's retirement from the partnership:
1. Assuming a bonus to Baskin.
2. Assuming a revaluation of total partnership capital based on excess payment.
3. Assuming goodwill equal to the excess payment is recorded.

Quizplus · Accepted Answer

The Answer of A summary balance sheet for the Akerly, Baskin, and Crow partnership on December 31, 2014 is shown below. Partners Akerly, Baskin, and Crow allocate profit and loss in their respective ratios of 3:2:1. The partnership agreed to pay partner Baskin $500,000 for his partnership interest upon his retirement from the partnership on January 1, 2015. The partnership financials on January 1, 2015 are:
  Required:
Prepare the journal entry to reflect Baskin's retirement from the partnership:
1. Assuming a bonus to Baskin.
2. Assuming a revaluation of total partnership capital based on excess payment.
3. Assuming goodwill equal to the excess payment is recorded.

A Summary Balance Sheet for the Akerly, Baskin, and Crow