Reference no: EM132790122
Art, Bert and Chris have been partners in an accounting firm for more than 5 years. Bert decided to retire and wishes to withdraw from the partnership. To facilitate his withdrawal, the partnership prepared the following before Bert's withdrawal:
Cash......................................................P 1,060,000
Accounts Receivable, net...............................240,000
Furniture and Fixture.......................................400,000
Office Equipment...........................................300,000
TOTAL ASSETS.............................................P 2,000,000
Accounts Payable..............................................P 200,000
Art, Capital.........................................................500,000
Bert, Capital.......................................................800,000
Chris, Capital.........................................................500,000
TOTAL LIABILITIES & EQUITIES...............................................P 2,000,000
The partners 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 P120,000 and P80,000, respectively.
Required:
Problem 1: Under each of the following situations, prepare the necessary journal entries on the books of the partnership to record the withdrawal of Bert:
1. Bert is to receive P880,000.
2. Bert is to receive P800,000.
3. Bert is to receive P920,000.