Gregorio is retiring from the partnership of Guerra, Guillermo, and Gregorio. The profit and loss ratio is 2:2:1, respectively. After the accountant has posted the revaluation and closing entries, the credit balances in the Capital accounts are: Guerra, P530,000; Guillermo, P430,000; and Gregorio, P210,000. Required: Journalize the journal entries to record the retirement of Gregorio under each of the following unrelated assumptions: Gregorio retires, talking P210,000 of partnership cash for her equity. Gregorio retires, talking P270,000 of partnership cash for her equity.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Problem #4
Withdrawal of a Partner
Gregorio is retiring from the
Required: Journalize the
- Gregorio retires, talking P210,000 of partnership cash for her equity.
- Gregorio retires, talking P270,000 of partnership cash for her equity.
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