urchase the interest by paying 126, 000 and no goodwill is to be recorded C. The partnership will purchase the interest by paying 150, 000 and goodwill is to be recorded . Required: i. Table (like in the discussion ). ii. Entry upon retirement of Kathy. iii.Answers to the following questions: 1. What will be the total capital of the partnership upon Kathy's retirement? 2. What will be the new partnership sharing agreement? 3. What amount of capital will be debited / credited to
urchase the interest by paying 126, 000 and no goodwill is to be recorded C. The partnership will purchase the interest by paying 150, 000 and goodwill is to be recorded . Required: i. Table (like in the discussion ). ii. Entry upon retirement of Kathy. iii.Answers to the following questions: 1. What will be the total capital of the partnership upon Kathy's retirement? 2. What will be the new partnership sharing agreement? 3. What amount of capital will be debited / credited to
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 43P
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The following balances as at October 31, 2016 for the Partnership of Kathy , Lilia and Minda were as follows :
Kathy , Capital 127,500
Lilia , Capital 82,500
Minda , Capital 225,000
Kathy has decided to retire from the partnership on October 31. Their profit and loss ratio is 3:3 :4 to Kathy , Lilia and Minda , respectively.
Assumptions :
A. The partnership will purchase the interest by paying 168,000 and no goodwill is to be recorded.
B. The partnership will purchase the interest by paying 126, 000 and no goodwill is to be recorded
C. The partnership will purchase the interest by paying 150, 000 and goodwill is to be recorded .
Required:
i. Table (like in the discussion ).
ii. Entry upon retirement of Kathy.
iii.Answers to the following questions:
1. What will be the total capital of the partnership upon Kathy's retirement?
2. What will be the new partnership sharing agreement?
3. What amount of capital will be debited / credited to Kathy upon Kathy's retirement? ( indicate whether it is debit or credit )
4. What amount of capital will be debited / credited to Lilia upon Kathy's retirement? ( indicate whether it is debit or credit )
5. What amount of capital will be debited / credited to Minda upon Kathy's retirement? ( indicate whether it is debit or credit )
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