Miura, Nakagawa and Ono have interests in MNO Partnership. The partners have capital balances of $200,000, $160,000, and $140,000 respectively, and share income in a 5:3:2 ratio. Ono is retiring from the partnership.
Required
Record the entry or entries needed under each of the following circumstances:
a. Miura and Nakagawa buy Ono's interest using $180,000 of their personal cash. Miura and Nakagawa retain the same income-sharing relationship as before.
b. Miura and Nakagawa buy Ono's interest using $180,000 of partnership cash. Miura and Nakagawa retain the same income-sharing relationship as before. The bonus method is used.
c. Miura and Nakagawa buy Ono's interest by transferring ownership of partnership equipment valued at $180,000. The equipment is currently reported on the partnership books at $150,000. The total goodwill approach is used, and the partnership's other net assets are reported at amounts approximating fair value.

Question

Quizplus · Accepted Answer

The Answer of Miura, Nakagawa and Ono have interests in MNO Partnership. The partners have capital balances of $200,000, $160,000, and $140,000 respectively, and share income in a 5:3:2 ratio. Ono is retiring from the partnership.
Required
Record the entry or entries needed under each of the following circumstances:
a. Miura and Nakagawa buy Ono's interest using $180,000 of their personal cash. Miura and Nakagawa retain the same income-sharing relationship as before.
b. Miura and Nakagawa buy Ono's interest using $180,000 of partnership cash. Miura and Nakagawa retain the same income-sharing relationship as before. The bonus method is used.
c. Miura and Nakagawa buy Ono's interest by transferring ownership of partnership equipment valued at $180,000. The equipment is currently reported on the partnership books at $150,000. The total goodwill approach is used, and the partnership's other net assets are reported at amounts approximating fair value.

Miura, Nakagawa and Ono Have Interests in MNO Partnership