Table 12-8 Jimmy, Johnny, and Joey Are Partners in the 3J Company

question 199

Multiple Choice

Table 12-8
Jimmy, Johnny, and Joey are partners in the 3J Company sharing profits and losses equally. Joey has decided to leave the partnership. After all accounts have been updated, the capital balances of the partners are currently $90,000, $120,000, and $70,000, respectively.
-Refer to Table 12-8.Assume Joey takes $100,000 in cash.The entry to record his withdrawal from the partnership includes a:

• A) debit to Jimmy, Capital for $30,000
• B) credit to Johnny, Capital for $15,000
• C) debit to Johnny, Capital for $15,000
• D) debit to Joey, Capital for $100,000

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Definitions:

Full-cost Method

A method of accounting for all expenditures associated with the exploration and development of oil and gas reserves as capitalized costs, which are then amortized over the total volume of proven resources.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that is globally accepted for financial reporting.

Operating Asset

An Operating Asset is an asset used by a company in its day-to-day operations to generate revenue, such as machinery, buildings, or equipment.

Components

Parts or elements that make up a larger system or compound.