When Danny Withdrew from John, Daniel, Harry, and Danny, LLP

question 54

Multiple Choice

When Danny withdrew from John, Daniel, Harry, and Danny, LLP, he was paid $80,000, although his capital account balance was only $60,000. The four partners shared net income and losses equally. The journal entry to record the effect on John's capital due to Danny's withdrawal would include:

• A) $6,667 debit to John, Capital.
• B) $6,667 credit to John, Capital.
• C) $20,000 debit to John, Capital.
• D) $5,000 debit to John, Capital.
• E) $5,000 credit to John, Capital.
• ($80,000 - $60,000) ÷ 3 = $6,667

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