Reference no: EM132807208

On July 10, 2019, Partner Ibrahim decided to withdraw from the 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, 2029

ASSETS

Cash 74,000
Trade Accounts Receivable (net) 36,000
Plant Assets (net) 135,000
Goodwill (net) 30,000
Total 275,000

LIABILITIES and PARTNER'S EQUITY

Liabilties 45,000
Cebedo, Capital 120,000
Basa, Capital 60,000
Ibrahim, Capital 50,000
Total 275,000

Required:

Problem 1: Prepare the Journal Entries to record Ibrahim's withdrawal under each of the following assumptions:

1. Ibrahim is paid 54,000, and the excess amount paid over Ibrahim's capital account balance is recorded as a bonus to Ibrahim from Cebedo & Basa.
2. Ibrahim is paid 45,000 and the difference is recorded as a bonus to Cebedo & Basa from Ibrahim.
3. Ibrahim accepted cash of 40,500 and plant assets (equipment) with a current fair value of 9,000. The equipment had cost 30,000 and was 60% depreciated, with no residual value (Record any gain and loss on the disposal of the equipment in the partner's capital accounts.)