Reference no: EM132840277

Question - Accounting for Partnership/Advance accounting - Please help me answer the following requirements below

The partnership of Aa, Ba and Ka has been in business for 25 years. On December 31, Ka decided to retire from the partnership. The statement of financial position before the retirement of Ka is presented below:

Cash 40,000

Accounts receivable 60,000

Inventory 140,000

Plant assets - net 400,000

Loan to Aa 30,000

Loan to Ka 40,000

Total assets 710,000

Accounts payable 70,000

Notes payable 80,000

Loan from Ba 50,000

Aa, Capital (20%) 150,000

Ba, Capital (30%) 200,000

Ka, Capital (50%) 160,000

Total liabilities & equity 710,000

Required - Record the withdrawal of Ka under each of the following independent cases:

1) Ka was paid P150,000 cash upon his retirement. The partnership goodwill attributable to the partners were recorded by the partnership.

2.) Due to the limited cash of the partnership, Ka was paid merchandise with a fair value of P100,000 and a note payable for P50,000. The carrying amount of the merchandise was P60,000. Capital of the partnership after Ka's retirement was P360,000.