Ho-Kim-Ling Design Company is a partnership owned by three individuals. The partners share profits and losses in the ratio of 30% to Ho, 40% to Kim, and 30% to Ling. At December 31, 2024, the firm has the following balance sheet. On December 31, Ho withdraws from the partnership.

Requirements
Record Ho’s withdrawal from the partnership under the following independent plans:
1. In a personal transaction, Ho sells her equity to Wei, who pays Ho $120,000 for her interest. Kim and Ling agree to accept Wei as a partner.
2. The partnership pays Ho cash of $10,000 and gives her a note payable for the remainder of her book equity in settlement of her partnership interest.
3. The partnership pays Ho $65,000 for her book equity.
4. The partnership pays Ho $25,000 for her book equity.

Transcribed Image Text:

Assets Cash Accounts Receivable, Net Merchandise Inventory Equipment, Net Total Assets HO-KIM-LING DESIGN COMPANY Balance Sheet December 31, 2024 $ 10,000 Accounts Payable 12,000 94,000 95,000 $ 211,000 Liabilities Partners' Equity Ho, Capital Kim, Capital Ling, Capital Total Partners' Equity Total Liabilities and Partners' Equity $ 87,000 35,000 47,000 42,000 124,000 $ 211,000