Problem:
After the books are closed, Ying & Yang's partnership balance sheet reports capital of $80,000 for Ying and $120,000 for Yang. Ying is withdrawing from the firm. The partners agree to write down partnership assets by $75,000. They have shared profits and losses in the ratio of 2/5 to Ying and 3/5 to Yang. The partnership agreement states that a withdrawing partner will receive assets equal to the book value of his owners equity.
Required:
Question 1: How much will Ying receive? Ying will continue to operate the business as a proprietorship.
Question 2: What is Ying's beginning capital on the books of his new proprietorship?
Note: Please show the work not just the answer.