E 16-11 Recording partner retirement—Revaluation case Capital balances and profit-sharing percentages for the Achmad, Fakhry, and Fatimah partnership on December 31, 2016, just before the retirement of Fatimah, are as follows:

Achmad capital (30%) $120,000 Fakhry capital (40%) 180,000 Fatimah capital (30%) 120,000

$420,000 On January 1, 2017, Fatimah is paid $150,000 cash on her retirement. The net assets have a book value equal to fair value.

REQuIRED: Prepare journal entries to record Fatimah’s retirement assuming that Fatimah’s share of assets are revalued.

Partnerships—Formation, Operations, and Changes in Ownership Interests 553