Journalize the withdrawal of posada

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Reference no: EM13818638

On December 31, the capital balances and income ratios in TEP Company are as follows.

Partner	Capital Balance	Income Ratio
Brayer	$60,000	50%
Emig	40,000	30%
Posada	30,000	20%

Instructions

(a) Journalize the withdrawal of Posada under each of the following assumptions.

(1) Each of the continuing partners agrees to pay $18,000 in cash from personal funds to purchase Posada"s ownership equity. Each receives 50% of Posada"s equity.

(2) Emig agrees to purchase Posada"s ownership interest for $25,000 cash.

(3) Posada is paid $34,000 from partnership assets, which includes a bonus to the retiring partner.

(4) Posada is paid $22,000 from partnership assets, and bonuses to the remaining partners are recognized.

(b) If Emig"s capital balance after Posada"s withdrawal is $43,600, what were (1) the total bonus to the remaining partners and (2) the cash paid by the partnership to Posada?

Reference no: EM13818638

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