On December 31, the capital balances and income ratios in Noma Company are as follows.
|
Partner |
Capital Balance |
Income Ratio |
|
Morgan |
$100,000 |
60% |
|
White |
51,000 |
30 |
|
Ogden |
25,000 |
10 |
Instructions
(a) Journalize the withdrawal of Ogden under each of the following independent assumptions.
(1) Each of the remaining partners agrees to pay $15,000 in cash from personal funds to purchase Ogden’s ownership equity. Each receives 50% of Ogden’s equity.
(2) White agrees to purchase Ogden’s ownership interest for $22,000 in cash.
(3) From partnership assets, Ogden is paid $34,000, which includes a bonus to the retiring partner.
(4) Ogden is paid $19,000 from partnership assets. Bonuses to the remaining partners are recognized.
(b) If White’s capital balance after Ogden’s withdrawal is $55,000, what were (1) the total bonus to the remaining partners and (2) the cash paid by the partnership to Ogden?