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Title: Gary, Peter, and Chris own a firm as partners. Gary has a capital balance of $22,000; Peter a ... Post by: moeMoeMoooo on Jul 26, 2018 Gary, Peter, and Chris own a firm as partners. Gary has a capital balance of $22,000; Peter a capital balance of $42,000; and Chris has a capital balance of $32,000. As per the partnership agreement, Gary gets a profit share of 2/9; Peter has 4/9; and Chris has 3/9. Which of the following is true, if Gary withdraws from the partnership by receiving $22,000?
A) Peter, Capital and Chris, Capital will be credited for $11,000 each. B) Gary, Capital will be debited for $22,000. C) Cash is debited for $22,000. D) Peter, Capital will be credited for $22,000. Title: Gary, Peter, and Chris own a firm as partners. Gary has a capital balance of $22,000; Peter a ... Post by: monithedoll on Jul 26, 2018 B
Explanation: B) The debit entry to Gary, Capital account will close his capital account. There are no bonuses since Gary received the book value of his capital account. |