Scribd
Upload
169 views10 pages

Retirement of Partner: Case Analysis

The document describes 7 cases of the retirement of a partner, Dancel, from a partnership. For each case, it provides the balances before and after retirement, and instructs to record the necessary journal entries. The summaries are: 1) Dancel's capital account is closed out and cash is distributed to the other partners based on profit sharing ratios. 2) Dancel's capital is transferred to Daet's capital account. 3) Cash is distributed and residual amounts are transferred to the other partners' capital accounts.

Uploaded by

EnlightenME
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
169 views10 pages

Retirement of Partner: Case Analysis

The document describes 7 cases of the retirement of a partner, Dancel, from a partnership. For each case, it provides the balances before and after retirement, and instructs to record the necessary journal entries. The summaries are: 1) Dancel's capital account is closed out and cash is distributed to the other partners based on profit sharing ratios. 2) Dancel's capital is transferred to Daet's capital account. 3) Cash is distributed and residual amounts are transferred to the other partners' capital accounts.

Uploaded by

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

Problem 5-4

(Retirement of a Partner under


Various Cases)
PROBLEM:
 On January 1, 2014, Dancel decided to retire
from the partnership of Daet, Dais, and
Dancel, who share profits and loses in the ratio
of [Link], respectively. The condensed
statement of financial position shown on the
next page presents the account balances
immediately before and, for seven
independent cases, after Dancel’s retirement.

INSTRUCTIONS:
 Prepare the necessary journal entries to record
the retirement of Dancel from the partnership
for each of the seven independent cases.
CASE 1:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 40,000 = 160,000


Other Assets 400,000 400,000
Total Assets P 600,000 P 440,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 148,000 = 12,000
Dais, Capital 180,000 172,000 = 8,000
Dancel, Capital 140,000 -0- = 140,000
Total Liabilities and Capital P 600,000 P 440,000

JOURNAL ENTRIES:

Daet, Capital 12,000


Dais, Capital 8,000
Dancel Capital 140,000
Cash 160,000
CASE 2:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 200,000


Other Assets 400,000 400,000
Total Assets P 600,000 P 600,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 300,000 = (140,000)
Dais, Capital 180,000 180,000
Dancel, Capital 140,000 -0- = 140,000
Total Liabilities and Capital P 600,000 P 600,000

JOURNAL ENTRIES:

Dancel, Capital 140,000


Daet, Capital 140,000
CASE 3:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 70,000 = 130,000


Other Assets 400,000 400,000
Total Assets P 600,000 P 470,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 166,000 = (6,000)
Dais, Capital 180,000 184,000 = (4,000)
Dancel, Capital 140,000 -0- = 140,000
Total Liabilities and Capital P 600,000 P 470,000

JOURNAL ENTRIES:

Dancel, Capital 140,000


Cash 130,000
Daet, Capital 6,000
Dais, Capital 4,000
CASE 4:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 32,000 = 168,000


Other Assets 400,000 468,000 = (68,000)
Total Assets P 600,000 P 500,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 184,000 = (24,000)
Dais, Capital 180,000 196,000 = (16,000)
Dancel, Capital 140,000 -0- = 140,000
Delia, Capital -0- -0-
Total Liabilities and Capital P 600,000 P 500,000

JOURNAL ENTRIES:
Other Assets 68,000
Dancel, Capital 140,000
Cash 168,000
Daet, Capital 24,000
Dais, Capital 16,000
CASE 5:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 120,000 = 80,000


Other Assets 400,000 440,000 = (40,000)
Total Assets P 600,000 P 560,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 220,000 = (60,000)
Dais, Capital 180,000 220,000 = (40,000)
Dancel, Capital 140,000 -0- = 140,000
Delia, Capital -0- -0-
Total Liabilities and Capital P 600,000 P 560,000

JOURNAL ENTRIES:
Other Assets 40,000
Dancel, Capital 140,000
Cash 80,000
Daet, Capital 60,000
Dais, Capital 40,000
CASE 6:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 200,000


Other Assets 400,000 400,000
Total Assets P 600,000 P 600,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 160,000
Dais, Capital 180,000 320,000 = (140,000)
Dancel, Capital 140,000 -0- = 140,000
Delia, Capital -0- -0-
Total Liabilities and Capital P 600,000 P 600,000

JOURNAL ENTRIES:

Dancel, Capital 140,000


Dais, Capital 140,000
CASE 7:
Balances prior to Balances after
Accounts
Dancel’s Retirement Dancel’s Retirement
Assets

Cash P 200,000 P 200,000


Other Assets 400,000 400,000
Total Assets P 600,000 P 600,000
Liabilities and Capital
Liabilities P 120,000 P 120,000
Daet, Capital 160,000 160,000
Dais, Capital 180,000 180,000
Dancel, Capital 140,000 -0- = 140,000
Delia, Capital -0- 140,000 = (140,000)
Total Liabilities and Capital P 600,000 P 600,000

JOURNAL ENTRIES:

Dancel, Capital 140,000


Delia, Capital 140,000

You might also like