MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Accounting, The Financial Chapters (My Accounting Lab)
MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Accounting, The Financial Chapters (My Accounting Lab)
11th Edition
ISBN: 9780133877502
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
bartleby

Videos

Question
Book Icon
Chapter 12, Problem E12.20E
To determine

Accounting for Withdrawal of partner from firm:

The Accounting for withdrawal of partner from the firm requires that the capital balance of retiring partner in the books of firm shall be completely closed by paying off his dues. This may occur three implications.

When the retiring partner is paid the amount equal to his balance of capital in the books, then the simple entry of payment of cash to retiring partner is made by debiting the partner capital account and crediting the cash with the amount paid.

However, when the balance shown in the books is more than the amount actually paid, then the the difference will be treated a s bonus for remaining partner and remaining partner capital shall be credited with the difference in proportion to their existing sharing ratio.

When the balance shown in the books is less than the amount actually paid, the difference will be treated as bonus for retiring partner and difference shall be taken from remaining partner in their existing sharing ratio.

The Journal entries for the withdrawal of partner.

Blurred answer

Chapter 12 Solutions

MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Accounting, The Financial Chapters (My Accounting Lab)

Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
What is liquidity?; Author: The Finance Storyteller;https://www.youtube.com/watch?v=XtjS7CfUSsA;License: Standard Youtube License