The capital balances and profit and loss ratios in ABC Partnership on December 31 are as follows: Partner Capital Balance Profit and Loss Ratio A. Alpha $72,000 60% B. Bravo $29,650 30% C. Charlie $24,000 10% Charlie is withdrawing from the company. Instructions: Journalize the withdrawal of Charlie under each of the following independent assumptions: a. Using personal funds, Bravo agrees to purchase Charlie's ownership interest for $29,000 cash. b. Charlie is paid $29,000 from partnership assets.
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.
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