On July 10, 2019, Partner Ibrahim decided to withdraw from Cebedo, Basa and Ibrahim Partnership. Their profit and loss ratio is 3:2:1, respectively. Partnership assets are to be used to acquire Ibrahim's partnership interest. The statement of financial position for the partnership on that date follows: Cebedo, Basa and Ibrahim Statement of Financial Position July 10, 2019 Assets Cash Trade Accounts Receivable (net) Plants Assets (net) Goodwill (net) Total P 74,000 36,000 135,000 30,000 P275,000 Liabilities and Partner's Capital Liabilities Cebedo, Capital Basa, Capital Ibrahim, Capital Total P 45,000 120,000 60,000 50,000 P275,000 Required: Prepare the journal entries to record Ibrahim's withdrawal under each of the following assumptions: 1. Ibrahim is paid P54,000, and the excess amount paid over Ibrahim's capital account balance is recorded as a bonus to Ibrahim from Cebedo and Basa. 2. Ibrahim is paid P45,000, and the difference is recorded as a bonus to Cebedo and Basa from Ibrahim. 3. Ibrahim accepted cash of P40,500 and plant assets (equipment) with a current fair value of P9,000. The equipement had cost P30,000 and was 60% depreciated, with no residual value (Record any gain or loss on the disposal of the equipment in the partner's capital accounts).
On July 10, 2019, Partner Ibrahim decided to withdraw from Cebedo, Basa and Ibrahim Partnership. Their profit and loss ratio is 3:2:1, respectively. Partnership assets are to be used to acquire Ibrahim's partnership interest. The statement of financial position for the partnership on that date follows: Cebedo, Basa and Ibrahim Statement of Financial Position July 10, 2019 Assets Cash Trade Accounts Receivable (net) Plants Assets (net) Goodwill (net) Total P 74,000 36,000 135,000 30,000 P275,000 Liabilities and Partner's Capital Liabilities Cebedo, Capital Basa, Capital Ibrahim, Capital Total P 45,000 120,000 60,000 50,000 P275,000 Required: Prepare the journal entries to record Ibrahim's withdrawal under each of the following assumptions: 1. Ibrahim is paid P54,000, and the excess amount paid over Ibrahim's capital account balance is recorded as a bonus to Ibrahim from Cebedo and Basa. 2. Ibrahim is paid P45,000, and the difference is recorded as a bonus to Cebedo and Basa from Ibrahim. 3. Ibrahim accepted cash of P40,500 and plant assets (equipment) with a current fair value of P9,000. The equipement had cost P30,000 and was 60% depreciated, with no residual value (Record any gain or loss on the disposal of the equipment in the partner's capital accounts).
Accounting (Text Only)
26th Edition
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter12: Accounting For Partnerships And Limited Liability Companies
Section: Chapter Questions
Problem 12.1BPR
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting (Text Only)
Accounting
ISBN:
9781285743615
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Accounting (Text Only)
Accounting
ISBN:
9781285743615
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning