Frank, George, and Scott are partners with capital accounts of $160,000, $120,000, and $210,000, respectively. Scott has informed Frank and George that he must withdraw from the partnership. The partners have agreed that the partnership will purchase Scott’s ownership interest for $250,000. The profit and loss residual ratios before Scott’s retirement are 45 percent, 30 percent, and 25 percent, respectively. How much will Frank’s capital account be reduced if the bonus method is applied for the withdrawal?
Frank, George, and Scott are partners with capital accounts of $160,000, $120,000, and $210,000, respectively. Scott has informed Frank and George that he must withdraw from the partnership. The partners have agreed that the partnership will purchase Scott’s ownership interest for $250,000. The profit and loss residual ratios before Scott’s retirement are 45 percent, 30 percent, and 25 percent, respectively. How much will Frank’s capital account be reduced if the bonus method is applied for the withdrawal?
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 21P
Related questions
Question
Frank, George, and Scott are partners with capital accounts of $160,000, $120,000, and $210,000, respectively. Scott has informed Frank and George that he must withdraw from the
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College