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).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem #5
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
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).
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