The capital account balances of the partners in ABC Partnership on June 30, 20×1 before any necessary adjustments are as follows: Capital accounts A, Capital (20%) B, Capital (30%) C,

The capital account balances of the partners in ABC Partnership on June 30, 20×1 before any necessary adjustments are as follows: Capital accounts A, Capital (20%) B, Capital (30%) C, Capital (50%) Total 600,000 1,000,000 400,000 2,000,000 The partnership reported profit of P3,600,000 for the six months ended June 30, 20×1. Required: 1. On July 1, 20×1, C withdraws from the partnership when he was bought-out by his co-partners for P2,480,000 cash. How much is the capital balance of A immediately after the withdrawal of C? Show computation. 2. Cretires on July 1, 20×1. It was agreed that C shall receive P2,480,000 cash from the partnership in settlement of his interest. How much is the capital balance of B right after the withdrawal of C? Show computation. 3. Cretires on July 1, 20×1. It was agreed that C shall receive cash of P2,000,000 and equipment with carrying amount of P400,000 and fair value of P1,200,000 as settlement of his interest in the partnership. Provide journal entries upon C’s retirement. Transcribed Image Text: The capital account balances of the partners in ABC Partnership on June 30, 20×1 before any necessary
adjustments are as follows:
Capital accounts
A, Capital (20%)
B, Capital (30%)
C, Capital (50%)
600,000
1,000,000
400,000
Total
2,000,000
The partnership reported profit of P3,600,000 for the six months ended June 30, 20×1.
Required:
1. On July 1, 20×1, C withdraws from the partnership when he was bought-out by his co-partners for
P2,480,000 cash. How much is the capital balance of A immediately after the withdrawal of C?
Show computation.
2. C retires on July 1, 20×1. It was agreed that C shall receive P2,480,000 cash from the partnership
settlement of his interest. How much is the capital balance of B right after the withdrawal of C?
Show computation.
3. C retires on July 1, 20×1. It was agreed that C shall receive cash of P2,000,000 and equipment with
carrying amount of P400,000 and fair value of P1,200,000 as settlement of his interest in the
partnership. Provide journal entries upon C’s retirement. (

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