Withdrawal of a Partner 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 Liabilities and Partner’s Capital Cash P 74,000 Liabilities P 45,000 Trade Accounts Receivable (net) 36,000 Cebedo, Capital 120,000 Plants Assets (net) 135,000 Basa, Capital 60,000 Goodwill (net) 30,000 Ibrahim, Capital 50,000 Total P275,000 Total P275,000 Required: Prepare the journal entries to record Ibrahim’s withdrawal under each of the following assumptions: 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. Ibrahim is paid P54,000, and the difference is recorded as a bonus to Cebedo and Basa from Ibrahim. 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).
Withdrawal of a Partner
On July 10, 2019, Partner Ibrahim decided to withdraw from Cebedo, Basa and Ibrahim Partnership. Their
Cebedo, Basa and Ibrahim
Statement of Financial Position
July 10, 2019
Assets Liabilities and Partner’s Capital
Cash P 74,000 Liabilities P 45,000
Trade Accounts Receivable (net) 36,000 Cebedo, Capital 120,000
Plants Assets (net) 135,000 Basa, Capital 60,000
Total P275,000 Total P275,000
Required:
Prepare the
- 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.
- Ibrahim is paid P54,000, and the difference is recorded as a bonus to Cebedo and Basa from Ibrahim.
- 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).
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