Wright, Bell, and Edison Are Partners and Share Income in a 2:5:3

question 88

Multiple Choice

Wright, Bell, and Edison are partners and share income in a 2:5:3 ratio. The partnership's capital balances are as follows: Wright, $33,000, Bell $27,000 and Edison $40,000. Edison decides to withdraw from the partnership, and the partners agree not to revalue the assets upon Edison's retirement.
-The journal entry to record Edison's June 1 withdrawal from the partnership if Edison is paid $40,000 for his equity is:

• A) Debit Wright, Capital $20,000; Debit Bell, Capital $20,000; credit Cash $40,000.
• B) Debit Edison, Capital $40,000; credit Wright, Capital $20,000; credit Bell, Capital $20,000.
• C) Debit Edison, Capital $40,000; credit Cash $40,000.
• D) Debit Wright, Capital $20,000; Debit Bell, Capital $20,000; credit Edison, Capital $40,000.
• E) Debit Cash $40,000; credit Edison, Capital $40,000.

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Definitions:

Healthy Unit

A term that could refer to a well-functioning entity, such as a team or family, that maintains positive relationships and communication.

Sources of Vulnerability

Factors or situations that increase the susceptibility of individuals or systems to harm or damage.

Psychological Wounds

Emotional damage or trauma resulting from distressing experiences, affecting an individual's mental health and functioning.

Triggered

Describes a response activated by a specific stimulus, often resulting in emotional or psychological distress.