Answer:
A. Carol, Capital is debited for $4,500
Explanation:
The question says to determine amount to be included in the journal entry to record Ronald's withdrawal from the partnership
Assumption: Equal Profit- loss sharing is the agreement between the existing partners.
First premise: Ronald's Capital in the Partnership = $77,000
However, Ronald received a payment of $86,000 meaning that there is an excess of $86,000-$77,000= $9,000
Since the agreement is equal profit and loss sharing, it means each of Ross and Carol will contribute 1/2 of the $9,000.
The journal entry to record this transaction is as follows:
Particulars Debit Credit
Carol Capital Account $4,500
Ross Capital Account $4,500
Ronald Capital Account $9,000
Being the equal contribution of excess amount paid to Ronald on exit from the partnership by Carol and Ross.
Based on the multiple choices, the correct answer is Carol, Capital is debited for $4,500
