The partnership shows the following capital balances at the date of Bohme's withdrawal: Lennon,$252,000,Bohme,$114,000,and Starr,$114,000.The partners (Lennon,Bohme,and Harrington) share income and loss equally.Bohme withdraws and is paid $122,000 of cash.How would the partnership record the withdrawal of Bohme?
A)Debit Cash for $122,000 and credit Bohme,Capital for $122,000.
B)Debit Bohme,Capital for $122,000 and credit Cash for $122,000.
C)Debit Lennon,Capital for $4,000,debit Starr,Capital for $4,000,debit Bohme,Capital for $114,000 and credit Cash for $122,000.
D)Debit Lennon,Capital for $57,000,debit Starr,Capital for $57,000,and credit Bohme,Capital for $114,000.
E)Debit Bohme,Capital for $114,000,credit Lennon,Capital for $57,000,and credit Starr,Capital for $57,000.

Question

Quizplus · Accepted Answer

Bohme's capital account is debited for the balance of $114,000. The excess payment of $8,000 ($122,000 - $114,000) is shared equally by Lennon and Starr, reducing their capital accounts by $4,000 each.

The Partnership Shows the Following Capital Balances at the Date