REFERENCE: Ref.14_05
Donald,Anne,and Todd have the following capital balances;$40,000,$50,000 and $30,000 respectively.The partners share profits and losses 20%,40%,and 40% respectively.
-Anne retires and is paid $80,000 based on the terms of the original partnership agreement.If the bonus method is used,what is the capital of the remaining partners?

Question

Quizplus · Accepted Answer

The $30,000 bonus is deducted from the remaining partners according to their relative profit and loss ratio.Donald = 20% and Todd = 40% which is a 1/3,2/3 split.
Donald = $40,000 - (1/3 x $30,000)= $30,000.
Todd = $30,000 - (2/3 x $30,000)= $10,000.

REFERENCE: Ref.14_05 Donald,Anne,and Todd Have the Following Capital Balances;$40,000,$50,000 and $30,000 Respectively.The