Assume the partnership of Dean, Hardin, and Roth has been in existence for a number of years. Dean decides to withdraw from the partnership when the partners' capital balances are as follows:Partner Capital BalanceProfit and Loss Ratio Dean$60,00040%Hardin 15,00030%Roth 25,00020%??An appraisal of the business and its property estimates the fair value to be $ 100,000. Dean has agreed to receive $64,000 in exchange for his partnership interest.?Prepare the journal entry for the payment to Dean in the dissolution of his partnership interest, assuming the bonus method is to be applied.
What will be an ideal response?
| Dean, Capital | 60,000 | |
| Hardin, Capital | 2,400 | |
| Roth, Capital | 1,600 | |
| Cash | 64,000 | |
? | ||
| ? | ||
| Feedback: Dean receives $4,000 more than his capital balance. The $4,000 excess distribution reduces the two remaining partners' capital balances in their existing profit and loss ratios of 30:20 which is 60% and 40% of the $4,000. | ||
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