Norman, Olivia and Patty are partners with capital accounts of $400,000, $650,000 and $200,000 respectively. Income is shared in a 1:3:1 ratio. Norman resigns from the partnership and receives $350,000 in partnership cash.
Required
Record Norman's resignation on the partnership books, under each of the following assumptions:
a. The bonus method is used.
b. The partial goodwill approach is used, and partnership buildings and equipment are determined to be overvalued by $250,000.
c. The total goodwill approach is used, and partnership buildings and equipment are determined to be overvalued by $250,000.

Question

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The Answer of Norman, Olivia and Patty are partners with capital accounts of $400,000, $650,000 and $200,000 respectively. Income is shared in a 1:3:1 ratio. Norman resigns from the partnership and receives $350,000 in partnership cash.
Required
Record Norman's resignation on the partnership books, under each of the following assumptions:
a. The bonus method is used.
b. The partial goodwill approach is used, and partnership buildings and equipment are determined to be overvalued by $250,000.
c. The total goodwill approach is used, and partnership buildings and equipment are determined to be overvalued by $250,000.

Norman, Olivia and Patty Are Partners with Capital Accounts of $400,000