Tep company _parnership accounts | Accounting homework help

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?

 

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