Holland, Flowers, and Tulip have been partners while sharing net income and loss

Question

Holland, Flowers, and Tulip have been partners while sharing net income and loss in a 5:3:2 ratio. On January 31, the date Tulip retires from the partnership, the equities of the partners are Holland, $350,000; Flowers, $240,000; and Tulip, $180,000.

Assume Tulip is paid $180,000 for her equity using partnership cash. Prepare journal entries to record Tulip's retirement.(Omit the "$" sign in you response.)

Assume Tulip is paid $200,000 for her equity using partnership cash. Prepare journal entries to record Tulip's retirement.(Do not round intermediate calculations and round your final answers to the nearest dollar amount.Omit the "$" sign in you response.)

Assume Tulip is paid $150,000 for her equity using partnership cash. Prepare journal entries to record Tulip's retirement.(Do not round intermediate calculations and round your final answers to the nearest dollar amount.Omit the "$" sign in you response.)

Holland, Flowers, and Tulip have been partners while sharing net income and loss in a 5:3:2 ratio. On January 31, the date Tulip retires from the partnership, the equities of the partners are Holland, $350,000; Flowers, $240,000; and Tulip, $180,000.

Explanation / Answer

Holland, Flowers, and Tulip have been partners while sharing net income and loss in a 5:3:2 ratio. On January 31, the date Tulip retires from the partnership, the equities of the partners are Holland, $350,000; Flowers, $240,000; and Tulip, $180,000. (1)Assume Tulip is paid $180,000 for her equity using partnership cash. Date General Journal Debit Credit Jan. 31 Tulip Capital Acct Dr 180,000 Cash Cr 180,000 (2) Assume Tulip is paid $200,000 for her equity using partnership cash. Prepare journal entries to record Tulip's retirement. SO 20000 will be shared by partners in their shareing ratio ie 5:3. This is Bonus to withdrawing partner Jan. 31 Tulip Capital Dr 180,000 Holland Capital Acct Dr 12,500 Flowers Caital Acct Dr 7,500 Cash Cr 200,000 (Holland 20000*5/8 = 12,500 , FLowers 20000*3/8 = 7500) (3) Assume Tulip is paid $150,000 for her equity using partnership cash. SO 30000 will be shared by partners in their shareing ratio ie 5:3. This is Bonus to remaining partner Jan. 31 Tulip Capital Dr 150,000 Holland Capital Acct Cr 18,750 Flowers Caital Acct Cr 12,250 Cash Cr 150,000 (Holland 30000*5/8 = 18,750, FLowers 30000*3/8 =12,250)

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