Answered: Manning, Capital... Gonzalez, Capital…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Problems 13 and 14 are independent problems based on the following scenario:

At year-end, the Circle City partnership has the following capital balances:

Profits and losses are split on a 3:3:2:2 basis, respectively. Clark decides to leave the partnership and is paid $90,000 from the business based on the original contractual agreement.

The payment made to Clark beyond his capital account was for Clark’s share of previously unrecognized goodwill. After recognizing partnership goodwill, what is Manning’s capital balance after Clark withdraws?

$133,000
$137,500
$140,000
$145,000

Manning, Capital...
Gonzalez, Capital
Clark, Capital .....
Freeney, Capital
$130,000
80,000
70,000

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