Solution-Record any gain or loss on disposal of the

Record any gain or loss on disposal of the equipment

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Reference no: EM132998169

A, B, and C are partners sharing profits in the ratio of 2:1:2, respectively. On December 31, 2030, C decided to withdraw from the partnership. Their capital balances on this date were as follows:

A, Capital ? 80,000
B, Capital 92,000
C, Capital 164,000

Required:

Record the withdrawal of C under each of the following independent assumptions.

C sold his interest to A and B for ?140,000; the interest being divided using the profit ratio by the remaining partners.
C sold his interest to the partnership for ?170,000 cash.
C sold his interest to the partnership for ?155,000 cash and partnership building is undervalued by ?30,000. Capital of the partnership after C's retirement was ?211,000.
C accepts cash of ?140,000 and an equipment with a current fair value of ?18,000. The equipment costs ?60,000, is 60% depreciated, and has no residual value.

Problem 1: Record any gain or loss on disposal of the equipment directly to the partners' capital accounts.

Reference no: EM132998169

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Record any gain or loss on disposal of the equipment

Reference no: EM132998169

Reference no: EM132998169

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