Reference no: EM132858251
Question - Josh, Jam, and Joy have been partners in a law office for 5 years. Jam has decided to retire and wishes to withdraw from the partnership. To facilitate Jam's withdrawal, the partnership prepared the following statement of financial position, which showed the following balances:
Cash 1,060,000
Accounts Receivable, net 240,000
Furniture and Fixture 400,000
Office Equipment 300,000
Total Assets 2,000,000
Accounts Payable 200,000
Josh, Capital 500,000
Jam, Capital 800,000
Joy, Capital 500,000
Total Equities 2,000,000
Josh, Jam and Joy share profits and losses in the ratio of 3:4:3. The partners agree that the furniture and fixtures and office equipment accounts are undervalued by 120,000 and 80,000 respectively.
Required - Prepare the necessary journal entries in the books of the partnership to record the withdrawal of Jam in each of the following situations.
(a) Jam is to receive 880,000
(b) Jam is to receive 800,000
(c) Jam is to receive 920,000