Reference no: EM131131928
On December 31, the capital balances and income ratios in FAD Company are as follows
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Instructions
(a) Journalize the withdrawal of Durham under each of the following assumptions.
(1) Each of the continuing partners agrees to pay $18,000 in cash from personal funds to purchase Durham's ownership equity. Each receives 50% of Durham's equity.
(2) Ames agrees to purchase Durham's ownership interest for $25,000 cash.
(3) Durham is paid $34,000 from partnership assets, which includes a bonus to the retiring partner.
(4) Durham is paid $22,000 from partnership assets, and bonuses to the remaining partners are recognized.
(b) If Ames's capital balance after Durham's withdrawal is $42,400 what were
(1) The total bonus to the remaining partners and
(2) The cash paid by the partnership toDurham?
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