Carrtman, Kennie, and Kile are partners in the Southe Park partnership. Kennie\'
ID: 2487042 • Letter: C
Question
Carrtman, Kennie, and Kile are partners in the Southe Park partnership. Kennie's death required his withdrawal from the partnership. According to the partnership agreement, any bonuses will be allocated on the basis of fixed ratios prior to the withdrawal. Additional information available prior to the withdrawal follows.
Prepare journal entries to record the withdrawal of Kennie, under each of the following independent assumptions.
1. Carrtman and Kile agree to purchase 1/2 of Kennie's capital account balance for $40,000 each.
2. The partnership pays Kennie's estate $80,000 for his partnership interest.
3. The partnership pays Kennie's estate $59,000 for his partnership interest.
Carrtment Kennie Kile Capital account balance $54,000 $64,000 $42,000 Fixed Ratio 42% 30% 28%Explanation / Answer
Account title Debit Credit 1 Kennies capital a/c $80,000 Carrtment Capitl A/c $40,000 Kile Caital a/c $40,000 2 Kennies capital a/c $80,000 Cash a/c $80,000 3 Kennies capital a/c $80,000 Cash A/c $80,000