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Part 5

- Partner Ibrahim withdrew from the Cebedo, Basa and Ibrahim Partnership on July 10, 2019 - The partnership statement of financial position on that date showed total assets of $275,000 and total capital of partners Cebedo, Basa and Ibrahim of $120,000, $60,000 and $50,000 respectively - The journal entries to record Ibrahim's withdrawal under different assumptions are provided, with distribution of amounts to remaining partners' capital based on their profit/loss ratio of 3:2:1

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4K views2 pages

Part 5

- Partner Ibrahim withdrew from the Cebedo, Basa and Ibrahim Partnership on July 10, 2019 - The partnership statement of financial position on that date showed total assets of $275,000 and total capital of partners Cebedo, Basa and Ibrahim of $120,000, $60,000 and $50,000 respectively - The journal entries to record Ibrahim's withdrawal under different assumptions are provided, with distribution of amounts to remaining partners' capital based on their profit/loss ratio of 3:2:1

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PRETTYKO
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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
10-Jul-19
Assets Liabilities and partner's capital
Cash 74,000.00 Liabilities 45,000.00
Trade A ( 36,000.00 Cebedo, capital 120,000.00
Plant A ( 135,000.00 Basa, Capital 60,000.00
Goodw ( 30,000.00 Ibrahim, Capital 50,000.00
Total 275,000.00 Total 275,000.00

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 Ibra
2. Ibrahim is paid P54,000, 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 c
P30,000 and was 60% depreciated, with no residual value (Record any gain or loss on the disposal of the equipment in the pa
Amount P&L
Cebedo, Capital 120,000.00 3
Basa, Capital 60,000.00 2
Ibrahim, Capital 50,000.00 1
Total 230,000.00

1 Ibrahim Capital 50,000.00


Cebedo, Capital 2,400.00 Cebedo, Capital
Basa, Capital 1,600.00 Basa, Capital
Cash 54,000.00 Total

2 Ibrahim Capital 50,000.00


Cash 45,000.00 Cebedo, Capital
Cebedo, capital 3,000.00 Basa, Capital
Basa, Capital 2,000.00 Total

3 Ibrahim, Capital 50,000.00


Cebedo, Capital 1,500.00
Basa, Capital 1,000.00 Cebedo, Capital
Plant Assets (net) 12,000.00 Basa, Capital
Cash 40,500.00 Total
nce is recorded as a bonus to Ibrahim from Cebedo and Basa.

of P9,000. The equipement had cost


sposal of the equipment in the partner’s capital accounts).

Amount P&L
117,600.00 3
58,400.00 2
176,000.00

Amount P&L
123,000.00 3
62,000.00 2
185,000.00

Amount P&L
118,500.00 3
59,000.00 2
177,500.00

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