N. Clark, C. Camille, and C. Eccleston have capital balances of $50,000, $40,000

Question

N. Clark, C. Camille, and C. Eccleston have capital balances of $50,000, $40,000, and $32,000, respectively. Their income ratios are 5 : 3 : 2. Eccleston withdraws from the partnership under each of the following independent conditions.

1. Clark and Camille agree to purchase Eccleston's equity by paying $17,000 each from their personal assets. Each purchaser receives 50% of Eccleston's equity.

2. Camille agrees to purchase all of Eccleston's equity by paying $22,000 cash from her personal assets.

3. Clark agrees to purchase all of Eccleston's equity by paying $26,000 cash from his personal assets.

Journalize the withdrawal of Eccleston under each of the assumptions above.

Explanation / Answer

1. Clark and Camille agree to purchase Eccleston's equity by paying $17,000 each from their personal assets. Each purchaser receives 50% of Eccleston's equity.

mmddyy Eccelston a/c Dr 32000

Clark cr 1000

Camille Cr 1000

Cash cr 34000

2. Camille agrees to purchase all of Eccleston's equity by paying $22,000 cash from her personal assets.

mmddyy Eccelston a/c Dr 32000

Camille cr 10000

Cash Cr 22000   

3. Clark agrees to purchase all of Eccleston's equity by paying $26,000 cash from his personal assets.

mmddyy Eccelston a/c Dr 32000

Clark cr 6000

Cash Cr 26000   

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