Dowker,Cross,and Rowe are partners in the DCR Company.They share profits and losses in a 3:5:2 ratio and have just closed their books for the period.The current balances in their capital accounts are $63,000,$49,000,and $94,000,respectively.Dowker has decided to withdraw from the partnership.The partners agreed,prior to the withdrawal of Dowker,that the assets needed to be revalued.Land with a cost of $55,000 has a current market value of $75,000.Inventory with a cost of $75,000 has a current market value of $70,000.Cross and Rowe have agreed to share net income in a 2:3 ratio.
a_Prepare the journal entries required to revalue the assets.
b_Prepare the journal entry to record the withdrawal of Dowker under each of the following independent assumptions:
1_The partnership gives cash to Dowker equal to his capital balance.
2_The partnership gives $76,000 cash to Dowker.
3_The partnership gives $56,000 cash to Dowker.

Question

Quizplus · Accepted Answer

The Answer of Dowker,Cross,and Rowe are partners in the DCR Company.They share profits and losses in a 3:5:2 ratio and have just closed their books for the period.The current balances in their capital accounts are $63,000,$49,000,and $94,000,respectively.Dowker has decided to withdraw from the partnership.The partners agreed,prior to the withdrawal of Dowker,that the assets needed to be revalued.Land with a cost of $55,000 has a current market value of $75,000.Inventory with a cost of $75,000 has a current market value of $70,000.Cross and Rowe have agreed to share net income in a 2:3 ratio.
a_Prepare the journal entries required to revalue the assets.
b_Prepare the journal entry to record the withdrawal of Dowker under each of the following independent assumptions:
1_The partnership gives cash to Dowker equal to his capital balance.
2_The partnership gives $76,000 cash to Dowker.
3_The partnership gives $56,000 cash to Dowker.

Dowker,Cross,and Rowe Are Partners in the DCR Company