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It is common for an existing partner to withdraw from a partnership. Settlement of the exiting partner’s ownership interest is made in accordance with provisions of the partnership agreement.
The withdrawal of a partner can be accounted for as a sale to a new partner, as a sale to one or more of the existing partners, or through a payment of partnership assets to the withdrawing partner. The following balance sheet of A, B, and C Partnership will be used to illustrate the concepts in this section:
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