In the RST partnership, Ron's capital is $80,000, Stella's is $75,000, and Tiffany's is $50,000. They share income in a 3:2:1 ratio, respectively. Tiffany is retiring from the partnership. Each of the following question is independent of the others.
Refer to the above information. Tiffany is paid $60,000, and no goodwill is recorded. In the journal entry to record Tiffany's withdrawal:
A) Tiffany, Capital will be credited for $60,000.
B) Ron, Capital will be debited for $5,000.
C) Stella, Capital will be debited for $4,000.
D) Cash will be debited for $60,000.
Correct Answer:
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