Following is a balance sheet for the partnership business of Amy, Lucy, and John: Assets Amount ($) Liabilities & Equity Amount ($) Cash 50,000 A/P 10,000 Inventory 45,000 N/P 50,000 Land 60,000 Building 230,000 Acc. Dep. 60,000 170,000 Amy's Capital Lucy's Capital John's Capital 130,000 80,000 55,000 Total 325,000 Total 325,000 The profit and loss sharing ratio between Amy, Lucy, and John was 2:1:1 respectively. Suppose John is retiring during the year. The appraisal of assets shows that current market value of inventory is $35000, while land valued at $92000. Required: Record the journal entries for appraisal of assets and John's retirement if he received $35000 in cash and a note payable of $55000. do not give answer in image format
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Following is a balance sheet for the partnership business of Amy, Lucy, and John:
| Assets | Amount ($) | Liabilities & Equity | Amount ($) |
| Cash | 50,000 | A/P | 10,000 |
| Inventory | 45,000 | N/P | 50,000 |
| Land | 60,000 | ||
|
Building 230,000 Acc. Dep. 60,000 |
170,000 |
Amy's Capital Lucy's Capital John's Capital |
130,000 80,000 55,000 |
| Total | 325,000 | Total | 325,000 |
The
Required:
Record the
do not give answer in image format
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