In the rst partnership, ron's capital is $80,000, stella's is $75,000, and tiffany's is $50,000. they share income in a 3: 2: 1 ratio, respectively. tiffany is retiring from the partnership. each of the following questions is independent of the others.
38. refer to the above information. tiffany is paid $60,000, and no goodwill is recorded. in the journal entry to record tiffany's withdrawal:
a. tiffany, capital will be credited for $60,000.
b. ron, capital will be debited for $5,000.
c. stella, capital will be debited for $4,000.
d. cash will be debited for $60,000.

C. Stella, Capital will be debited for $4,000.

Explanation:

As for the provided information, we have,

Out of all the partner's Tiffany is retiring.

Tiffany's capital balance = $50,000

On his retirement he is paid $60,000

Since no goodwill is recorded, the excess amount paid over capital = $60,000 - $50,000 = $10,000, will be debited in remaining partner's ratio.

Ron's share in these $10,000 = $10,000 3/(3+2) = $6,000

Stella's share = $10,000 2/(2+3) = $4,000

Thus, Correct answer is debiting Ron's capital by $6,000 and Stella's capital by $4,000

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explanation:

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