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Determine the amount received by axe upon his retirement

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Reference no: EM133063965

Question - The following balances were taken from the books of Art, Ace and Axe partnership on December 31, 2011:

Art Capital 200,000

Art Loan 50,000

Ace Capital 120,000

Ace Loan 20,000 (Dr)

Axe Capital 70,000

The partners share profits and losses in the ration 4:3:3. Axe decided to withdraw from the partnership on April 1, 2012 after suffering from financial problems. In the 1t quarter of 2012, the partnership made a profit of P54,000. The partners agreed to make the following adjustments to their assets to bring the balances to their fair values before the withdrawal of Axe:

a. Allowance for uncollectible accounts of P20,000 should be provided.

b. Inventories are to be reduced by P25,000.

The partnership paid Axe his interest plus 20% premium based on his adjusted capital for his contribution in the successful operation of the partnership.

Required - Determine the amount received by Axe upon his retirement?

Reference no: EM133063965

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