Chapter 5
Partnerships
243
John Karthik Harish Total
Capital balance before withdrawal
Withdrawal of Karthik
Capital balance after withdrawal
Analysis
Compare the impact on the assets of the partnership in parts d) and e).
AP-8B (
7
)
Jack, John, and Joe have been operating a business as a partnership for several years. On
January 1, 2016, Jack, John and Joe had a capital balance of $255,000, $180,000 and $132,000
respectively. However, due to a business conflict, Joe decided to withdraw from the partnership.
Jack and John decided to pay off Joe using the partnership’s cash.
Required
a) Calculate the new capital balance for each partner after the withdrawal of Joe.
Jack
John
Joe
Total
b) Prepare the journal entry to record the withdrawal of Joe.
Date
Account Title and Explanation
Debit
Credit
