The capital balances of partners in ABC Partnership on July 1,2019 before closing of net

income are as follows: A, capital ( 20%) –P 600,000 ; B, Capital ( 30%)-P 1,000,000; C, Capital
( 50%) –P 400,000. The partnership reported profit of P 3,600,000 for the six months ended
June 30, 2019. On July 1,2019, C withdrew from the partnership when he was bought -out by
his co-partners for P 2,480,000 cash. The net assets of the firm as of this date approximate
their fair values.

14.How much is the capital balance of partner A after withdrawal of C?

ABC Partnership
DATE A, Capital B, Capital C, Capital Total
1-Jul-19 600,000 1,000,000 400,000 2,000,000
120,000 200,000 320,000

1-Jul-19 C, Withdrawal 2,480,000

C, Capital 400,000 C, Withdrawal 2,480,000

-320,000 -200,000
80,000 2,280,000
-80,000
A, Capital 2,200,000

15.Assuming the assets are not fairly valued, how much is the total partnership capital
after withdrawal of C?

A B C
Beginning Capital 600,000 1,000,000 400,000
Share of Net Profit 720,000 1,080,000 1,800,000
Capital, ending after the
1,320,000 2,080,000 2,200,000
distribution of profit

Capital before withdrawal 1,320,000 2,080,000 2,200,000

Add: Share of Goodwill 112,000 168,000 280,000
Capital, ending before
1,432,000 2,248,000 2,480,000
withdrawal

Capital before withdrawal 1,432,000 2,248,000

Withdrawal 0 2,480,000
Capital, ending after
1,432,000 4,728,000
withdrawal

A, capital + B, capital = Total Capital of the firm after C's withdrawal

 A, capital + B, capital = Total Capital of the firm after C's withdrawal

6,160,000

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Members: