The partners of XYZ Partnership share profits and losses in the ratio X: 30% Y 3...
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The partners of XYZ Partnership share profits and losses in the ratio X: 30% Y 30% and Z 40%. The capital credit balances of the partners as at 1 January 2022 are: X=$30,000 Y=$30,00 Z=$40,000 and current account credit balances are: X= $4,000 Y=$3,000 Z=2,000. 1 January 2022, Z withdraws from the partnership and X and Y agree to continue with the partnership sharing profits and losses in the ratio X: 50% and Y 50%. Upon Z’s withdrawal from the partnership, the assets of the partnership were revalued resulting in a net credit balance of $20,000 in the revaluation account. Goodwill amounting to $30,000 is to be recorded in the books on the day Z retires. The journal entries to record the payment to Z by the partnership are:
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