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Julie Lane, Sara Miles, and Amber Noll have capital balances of $47,900, $35,200, and $29,600, respectively
Julie Lane, Sara Miles, and Amber Noll have capital balances of $47,900, $35,200, and $29,600, respectively. The profit and loss ratio is 5:3:2. Assume Noll withdraws from the partnership on December 31 of the current year under each of the following independent conditions:
1.
Miles agrees to purchase all of Noll's equity by paying $32,810 cash from her personal assets.
2.
Noll withdraws $29,600 cash from the partnership.
3.
Noll withdraws $35,200 cash from the partnership.
Journalize the withdrawal of Noll under each of the above assumptions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
(1) Dec. 31
select an account title to record withdrawal of a partner on December 31
Income Summary
S. Miles, Drawings
Cash
A. Noll, Capital
S. Miles, Capital
enter a debit amount
enter a credit amount
select an account title to record withdrawal of a partner on December 31
Income Summary
S. Miles, Capital
A. Noll, Capital
Cash
S. Miles, Drawings
enter a debit amount
enter a credit amount
(To record withdrawal of a partner.)(2) Dec. 31
select an account title to record withdrawal of a partner on December 31
A. Noll, Drawings
S. Miles, Capital
Cash
Income Summary
A. Noll, Capital
enter a debit amount
enter a credit amount
select an account title to record withdrawal of a partner on December 31
A. Noll, Drawings
Income Summary
S. Miles, Capital
Cash
A. Noll, Capital
enter a debit amount
enter a credit amount
(To record withdrawal of a partner.)(3) Dec. 31
select an account title to record withdrawal of a partner on December 31
Income Summary
J. Lane, Capital
A. Noll, Capital
Cash
S. Miles, Capital
enter a debit amount
enter a credit amount
select an account title to record withdrawal of a partner on December 31
Income Summary
Cash
A. Noll, Capital
J. Lane, Capital
S. Miles, Capital
enter a debit amount
enter a credit amount
select an account title to record withdrawal of a partner on December 31
S. Miles, Capital
Income Summary
J. Lane, Capital
Cash
A. Noll, Capital
enter a debit amount
enter a credit amount
select an account title to record withdrawal of a partner on December 31
S. Miles, Capital
J. Lane, Capital
Income Summary
A. Noll, Capital
Cash
enter a debit amount
enter a credit amount
(To record withdrawal of a partner.)
eTextbook and Media
Determine the balances in the partners' capital accounts and in total partners' equity after Noll has withdrawn, for conditions 1 and 3 above. (Do not leave any answer field blank. Enter 0 for amounts.)
Condition 1
J. Lane
CapitalS. Miles
CapitalA. Noll
CapitalTotal
CapitalBeginning balance
$
enter a dollar amount
$
enter a dollar amount
$
enter a dollar amount
$
enter a dollar amount
Ending balance
$
enter a dollar amount
$
enter a dollar amount
$
enter a dollar amount
$
enter a dollar amount
Condition 3
J. Lane
CapitalS. Miles
CapitalA. Noll
CapitalTotal
CapitalBeginning balance
$
enter a dollar amount
$
enter a dollar amount
$
enter a dollar amount
$
enter a dollar amount
Ending balance
$
enter a dollar amount
$
enter a dollar amount
$
enter a dollar amount
$
enter a dollar amount
Expert Solution
The journal entries to be booked will be
Date Description Debit($) Credit($)
Dec 31 A. Noll, Capital 29,600
S. Miles, Capital 29,600*
*this value cant exceed the amount standing in capital account of the outgoing partner
Dec 31 A. Noll, Capital 29,600
Cash 29,600
Dec 31 S. Miles, Capital 2,100 ((35200-29600)*3/8)
J. Lane, Capital 3,500 ((35200-29600)*5/8)
A. Noll, Capital 29,600
Cash 35,200
Step-by-step explanation
The table will be prepared in the following manner:
For 1
J. Lane Capital S Miles Capital A.Noll Capital Total
Beginning Balance 47,900 35,200 29,600 $112,700
Ending balance 47,900 64,800* 0 $112700
*(35200+29600)
For 3
J. Lane Capital S Miles Capital A.Noll Capital Total
Beginning Balance 47,900 35,200 29,600 $112,700
Ending balance 44,400 33,100 0 $77,500
(47900-3500) (35200-2100) 0
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Julie Lane, Sara Miles, and Amber Noll have capital balances of $47,900, $35,200, and $29,600, respectively. The profit and loss ratio is 5:3:2. Assume Noll withdraws from the partnership on December 31 of the current year under each of the following independent conditions:
1.
Miles agrees to purchase all of Noll's equity by paying $32,810 cash from her personal assets.
2.
Noll withdraws $29,600 cash from the partnership.
3.
Noll withdraws $35,200 cash from the partnership.
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