The partnership of Aa, Ba and Ka has been in business for 25 years. On December 31,
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Cash 40,000
Accounts receivable 60,000
Inventory 140,000
Plant assets - net 400,000
Loan to Aa 30,000
Loan to Ka 40,000
Total assets 710,000
Accounts payable 70,000
Notes payable 80,000
Loan from Ba 50,000
Aa, Capital (20%) 150,000
Ba, Capital (30%) 200,000
Ka, Capital (50%) 160,000
Total liabilities & equity 710,000
Required: Record the withdrawal of Ka under each of the following independent cases:
1.) Ka was paid P100,000 cash upon retirement. Capital of the partnership after Ka's retirement was to be P400,000.
2.) Ka was paid P180,000 cash upon retirement. Capital of the partnership after Ka's retirement was to be P290,000.
3.) Ka was paid P150,000 cash upon his retirement. The portion of goodwill attributable to Ka was recorded by the partnership.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: