Donna Karr, Alice Wright, and Nancy Shaffer Have Capital Balances

question 151

Essay

Donna Karr, Alice Wright, and Nancy Shaffer have capital balances of $100,000, $70,000, and $50,000, respectively, and they share profit on a 4:3:3 basis.
Instructions
Journalize the withdrawal of Wright from the partnership under each of the following circumstances:
a. Wright is paid $70,000 in cash from partnership assets.
b. Wright is paid $77,000 in cash from partnership assets.
c. Wright is paid $49,000 in cash from partnership assets.

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Definitions:

Uniform Limited Liability Company Act

A comprehensive statute that provides a legal framework for the formation, operation, and dissolution of limited liability companies (LLCs) in the jurisdictions that adopt it.

Operating Agreement

Operating agreement is a legal document outlining the governance and operating procedures of a limited liability company (LLC), including the rights and responsibilities of the members.

Member-managed

A management structure of a limited liability company where all members participate in the decision-making processes.

Market Price

The current value at which an asset or service can be bought or sold in a market, often determined by supply and demand dynamics.