A summary balance sheet for the Ash, Brown, and Curly partnership on December 31, 2011 is shown below.Partners Ash, Brown, and Curly allocate profit and loss in their respective ratios of 2:1:1.The partnership agreed to pay partner Brown $135,000 for his partnership interest upon his retirement from the partnership on January 1, 2012.The partnership financials on January 1, 2012 are:
Required:
Prepare the journal entry to reflect Brown's retirement from the partnership:
1.Assuming a bonus to Brown.
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 Ash, Brown, and Curly partnership on December 31, 2011 is shown below.Partners Ash, Brown, and Curly allocate profit and loss in their respective ratios of 2:1:1.The partnership agreed to pay partner Brown $135,000 for his partnership interest upon his retirement from the partnership on January 1, 2012.The partnership financials on January 1, 2012 are:
  Required:
Prepare the journal entry to reflect Brown's retirement from the partnership:
1.Assuming a bonus to Brown.
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 Ash, Brown, and Curly partnership on December 31, 2011 is shown below.Partners Ash, Brown, and Curly allocate profit and loss in their respective ratios of 2:1:1.The partnership agreed to pay partner Brown $135,000 for his partnership interest upon his retirement from the partnership on January 1, 2012.The partnership financials on January 1, 2012 are:
  Required:
Prepare the journal entry to reflect Brown's retirement from the partnership:
1.Assuming a bonus to Brown.
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 Ash, Brown, and Curly