Agler, Bates and Colter Are Partners Who Share Income in a 5:3:2

question 27

Essay

Agler, Bates and Colter are partners who share income in a 5:3:2 ratio. Colter, whose capital balance is $150,000, retires from the partnership.
Required:
Determine the amount paid to Colter under each of the following cases:
(1) $50,000 is debited to Agler capital account; the bonus approach is used.
(2) Goodwill of $60,000 is recorded; the partial goodwill approach is used.
(3) $66,000 is credited to Bates' capital account; the total goodwill approach is used.

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Definitions:

Task Behaviors

Actions focused on the logistics of job performance, including planning, organizing, and goal-setting.

Directing Behaviors

Actions taken by leaders to guide, command, or influence the actions and work of others.

Schedule B

A form attached to the IRS Form 1040 that is used to report interest and dividend income over certain amounts.

Forms 1040A

A simplified version of the IRS form 1040 used for filing individual income taxes, now discontinued and replaced by the redesigned Form 1040.