Simonsen, Paulson, and Richardson Are Partners in a Firm with the Following

question 42

Short Answer

Simonsen, Paulson, and Richardson are partners in a firm with the following capital account balances: Paulson is retiring from the partnership on December 31, 2017. The profit-and-loss-sharing ratio among Simonsen, Paulson, and Richardson is 1:3:2, in the order given. Paulson is paid $100,000 cash in full compensation for her capital account balance. Which of the following journal entries would the firm record for this transaction?

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Definitions:

Misinformation Effect

The tendency for post-event information to interfere with the memory of the original event, often leading to inaccurate recollections.

Filmed Traffic Accident

A filmed traffic accident is an event where a vehicular collision or road incident is captured on video, which can be used for evidence, analysis, or awareness purposes.

Smashed

To break something into pieces suddenly, noisily, and violently; shattered.

Broken Glass

Fragmented pieces of glass often resulting from breakage, which can pose a safety hazard.