E 16-11 Partner retirement entriesCapital balances and profit- and loss-sharing ratios for the Nix, Man, and Per partnership on December 31, 2016, just before the retirement of Nix, are as follows:Nix capital (30%)$128,000Man capital (30%)$140,000Per capital (40%)$160,000On January 2, 2017, Nix is paid $170,000 cash on his retirement.RequiredPrepare the journal entry or entries to record Nix’s retirement assuming that goodwill, as implied by the payment to Nix, is recorded on the partnership books.

Compute the goodwill of the firm:

Accounting (Text Only)

26th Edition

ISBN:9781285743615

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 12.26EX

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E 16-11 Partner retirement entries

Capital balances and profit- and loss-sharing ratios for the Nix, Man, and Per partnership on December 31, 2016, just before the retirement of Nix, are as follows:

Nix capital (30%)	$128,000
Man capital (30%)	$140,000
Per capital (40%)	$160,000

On January 2, 2017, Nix is paid $170,000 cash on his retirement.

Required

Prepare the journal entry or entries to record Nix’s retirement assuming that goodwill, as implied by the payment to Nix, is recorded on the partnership books.

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