Daggett, Lamppin, and Pendergast are partners who share profits and losses 50%, 30%, and 20%, respectively. Their capital balances are $150,000, $90,000, and $60,000, respectively.
Instructions
(a) Assume Sanford joins the partnership by investing $140,000 for a 25% interest with bonuses to the existing partners. Prepare the journal entry to record his investment.
(b) Assume instead that Daggett leaves the partnership. Daggett is paid $170,000 with a bonus to the retiring partner. Prepare the journal entry to record Daggett\'s withdrawal.
Solution
Particulars Debit Amount Credit Amount Cash A/C Dr                      140,000.00 To Sanford Capital                      110,000.00 To Daggett Capital                        15,000.00 To Lamppin capital                          9,000.00 To Pendergast capital                          6,000.00 Daggett Capital Dr                      150,000.00 Lamppin capital Dr                        12,000.00 Pendergast capital Dr                          8,000.00 To Cash                      170,000.00
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Daggett- Lamppin- and Pendergast are partners who share profits and lo (1).docx
1. Daggett, Lamppin, and Pendergast are partners who share profits and losses 50%, 30%, and
20%, respectively. Their capital balances are $150,000, $90,000, and $60,000, respectively.
Instructions
(a) Assume Sanford joins the partnership by investing $140,000 for a 25% interest with bonuses
to the existing partners. Prepare the journal entry to record his investment.
(b) Assume instead that Daggett leaves the partnership. Daggett is paid $170,000 with a bonus to
the retiring partner. Prepare the journal entry to record Daggett's withdrawal.
Solution
Particulars Debit Amount Credit Amount Cash A/C Dr
                     140,000.00 To Sanford Capital
                     110,000.00 To Daggett Capital
                       15,000.00 To Lamppin capital
                         9,000.00 To Pendergast capital
                         6,000.00 Daggett Capital Dr
                     150,000.00 Lamppin capital Dr
                       12,000.00 Pendergast capital Dr
                         8,000.00 To Cash
                     170,000.00
