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Withdrawal of partner

Lane Stevens is to retire from the partnership of Stevens and Associates as of March $31,$ the end of the current fiscal year. After closing the accounts, the capital balances of the partners are as

follows: Lane Stevens, $$250,000$; Cherrie Ford, $$128,000$; and LaMarcus Rollins, $$143,000.$ They have shared net income and net losses in the ratio of $3$:$2$:$2.$ The partners agree that the

inventory should be increased by $$23,100,$ and the allowance for doubtful accounts should be increased by $$5,600.$ Stevens agrees to accept a note for $$205,000$ in partial settlement of his

ownership equity. The remainder of his claim is to be paid in cash. Ford and Rollins are to share equally in the net income or net loss of the new partnership.

a$.$ Journalize the entry to record the adjustment of the assets to bring them into agreement with current market prices. If an amount box does not require an entry, leave it blank.

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a$.$ Adjust the inventory account and the allowance account, and adjust each partner's capital account for their income$-$sharing ratio by multiplying net inventory times $\frac{3}{7}$ for Winner's allocation and $\frac{2}{7}$ time net

inventory for both Richards' and Williams' allocation.

b$.$ Journalize the entry to record the withdrawal of Stevens from the partnership. If an amount box does not require an entry, leave it blank.

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