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What are the balances in James and Love capital accounts

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Question - Cavalier Accountants is a partnership with three partners. On February 28, 2018, the three partners, L. James, K. Irving, and K. Love, have capital balances of $85,000, $72,000, and $43,000 respectively. The profit and loss ratio is 4:3:1. On March 1, 2018, Irving withdraws from the partnership and they agree to pay him $90,000 cash from the partnership assets.

After Irving leaves, James and Love agree to a 4:2 profit ratio. During the year ended February 28, 2019, the partnership earns a profit of $24,000. Neither James nor Love makes any withdrawals because the partnership is short of cash after paying Irving. On March 1, 2019, James and Love agree to admit J. Cole to the partnership with a 45% interest for $75,000 cash. After Cole is admitted, the new profit ratio will be 4:2:5 for James, Love, and Cole, respectively.

Required -

a) Journalize the withdrawal of Irving from the partnership.

b) What are the balances in James' and Love's capital accounts after Irving leaves the partnership?

c) Prepare the journal entry to close the income summary account on February 28, 2019.

d) What is the total partnership capital on March 1, 2019, prior to admitting Cole?

e) Prepare the journal entry to record the admission of Cole into the partnership.

f) What is the balance in each of the partners' capital accounts after Cole is admitted to the partnership?

Reference no: EM132721403

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