FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Part 1. Gibbs, Hook, and Chan are partners and share income and loss in a 5:1:4 ratio (in percents: Gibbs,
50%; Hook, 10%; and Chan, 40%). The
Hook, $148,000; and Chan, $446,000. Gibbs decides to withdraw from the partnership. Prepare
entries
a. Gibbs sells her interest to Brady for $250,000 after Brady is approved as a partner.
b. Gibbs gives her interest to a daughter-in-law, Kannon, and Kannon is approved as a partner.
c. Gibbs is paid $606,000 in partnership cash for her equity.
d. Gibbs is paid $350,000 in partnership cash for her equity.
e. Gibbs is paid $200,000 in partnership cash plus manufacturing equipment recorded on the partnership
books at $538,000 less its
Part 2. Assume that Gibbs does not retire from the partnership described in part 1. Instead, Chip is admitted
to the partnership on April 30 with a 20% equity. Prepare journal entries to record the entry of Chip
under each separate assumption: Chip invests (a) $300,000; (b) $196,000; and (c) $426,000.
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