Chapter 5
Partnerships
242
c) Prepare a statement of changes in partners’ equity.
John
Karthik
Harish
Total
d) On January 1, 2017, Karthik decided to withdraw from the partnership. Harish and John
have decided to buy out Karthik’s interest in equal portion. Prepare the journal entry to
record the transaction and calculate the balance of the partners’ capital accounts after
Karthik leaves.
Date
Account Title and Explanation
Debit
Credit
John Karthik Harish Total
Capital balance before withdrawal
Withdrawal of Karthik
Capital balance after withdrawal
e) Independent of part d), assume instead that the partners have decided to pay off Karthik
using partnership assets. Prepare the journal entry to record the transaction and calculate
the balance of partners’ capital accounts after Karthik leaves.
Date
Account Title and Explanation
Debit
Credit
