After closing the temporary owners' equity accounts into Income Summary, and after allocating the net income and closing the partners' drawing accounts, assume the partners' capital accounts had credit balances as follows: Golden, $30,000; Chavez, $40,000; McGinnis, $55,000. If McGinnis retired and withdrew $50,000 in settlement of his/her equity, the amount entered in McGinnis's capital account would be a

Question

Quizplus · Accepted Answer

When McGinnis retires and withdraws $50,000, his/her capital account will be decreased. Since his/her capital account has a credit balance of $55,000, a debit entry of $50,000 will be made to his/her capital account, resulting in a remaining credit balance of $5,000. Therefore, the answer is C, $55,000 debit.

After Closing the Temporary Owners' Equity Accounts into Income Summary