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Retirement of A Partner

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ronsky1015
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35 views1 page

Retirement of A Partner

Practice Set

Uploaded by

ronsky1015
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Total Assets

1. On July 10, 2013 Lolo wants to retire from JKL Partnership. The statement of financial position for the JKL Partnership
before closing on that date shows the
following:
Cash P 148,000 Liabilities P 90,000
Receivables, net 72,000 Jose capital 200,000
Equipment, net 270,000 Kiko capital 96,000
Goodwill 60,000 Lolo capital 84,000
Income summary 80,000
Total P550,000 Total P550,000

Jose, Kiko and Lolo share profts and losses in the ratio of 5:3:2, respectively. The partners agreed to write off the
goodwill and to adjust the equipment to their fair market values of P230,000.Lolo is paid P110,000 cash for his total
interest.
Assuming the use of the total goodwill method the total assets of the new partnership after the retirement of Lolo is:
a. P554,000 c. P474,000
b. P490,000 d. P550,000 Guerrero 2013

2. The condensed statement of financial position of the partnership of Edong, Fredo and Godo with corresponding profit
and loss sharing percentage as of June 30, 2013 was as follows:
Net assets P400,000
Edong, capital (50%) P200,000
Fredo, capital (30%) 120,000
Godo, capital (20%) 80,000
P400,000
As of said date, Edong retired from the partnership. By mutual agreement, he was paid P225,000 for his interest in the
partnership. The total implied goodwill was to be recorded. After Edong's retirement, the total net assets of the
partnership was:
a. P250,000
b. P17 5,000
c. P200,000
d. P225,000
Guerrero 2013

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