At year-end, the Circle City partnership has the following capital balances: Manning, Capital . . . . . . . . . $130,000Gonzalez, Capital . . . . . . . . 110,000Clark, Capital . . . . . . . . . . . . 80,000Freeney, Capital . . . . . . .. . . 70,000 Profits and losses are split on a 3:3:2:2 basis, respectively. Clark decides to leave the partnership and is paid $90,000 from the business based on the original contractual agreement.The payment made to Clark beyond his capital account was for Clark’s share of previously unrecognized goodwill. After recognizing partnership goodwill, what is Manning’s capital balance after Clark withdraws? Choose the correct. a. $133,000 b. $137,500 c. $140,000 d. $145,000
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
At year-end, the Circle City
Manning, Capital . . . . . . . . . $130,000
Gonzalez, Capital . . . . . . . . 110,000
Clark, Capital . . . . . . . . . . . . 80,000
Freeney, Capital . . . . . . .. . . 70,000
The payment made to Clark beyond his capital account was for Clark’s share of previously unrecognized
Clark withdraws? Choose the correct. a. $133,000 b. $137,500 c. $140,000 d. $145,000
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
