Problem 12-4

Problem 12-4

Part 1. Lincecum , Cain , and Vogelsong are partners with capital balances as follows:

Lincecum Cain Vogelsong

The partners share income and loss in a : : ratio. Cain decides to withdraw from the partnership, and the partners agree to not have the assets revalued upon his retirement. Prepare journal entries to record Cain ’s March 1 withdrawal from the partnership under each of the following separate assumptions: Cain …

a) Sells his interest to Sandoval for after Lincecum and Vogelsong approve the entry of Sandoval as a partner;

b) Gives his interest to a son-in-law, Posey , and thereafter Lincecum and Vogelsong accept Posey as a partner;

c) Is paid in partnership cash for his equity; d) Is paid in partnership cash for his equity; and e) Is paid in partnership cash plus equipment recorded on the

partnership books at less its accumulated depreciation of .

Part 2. Assume that Cain does not retire from the partnership described in Part (1). Instead, Hudson is admitted to the partnership on March 1 with a equity. Prepare journal entries to record Hudson ’s entry into the partnership under each of the following separate assumptions: Huds invests…

a) b) c)

Check (1e) Db. Vogelsong , Capital (2c) Cr. Vogelsong , Capital

552,000$

425,000$

395,000$ 410,000 334,000

300,000$ 240,000$

125,000$

33%

25,000$ 75,710

350,000$

900,000$

6 4 5

410,000$

561,000$