Partner Eng plans to withdraw from Chu, Dow & Eng LLP on July 10, 2005. Partnership assets are to be used to acquire Eng’s partnership interest. The balance sheet for the partnership on that date follows:

CHU, DOW & ENG LLP Balance Sheet July 10, 2005 Assets Liabilities and Partners’ Capital Cash $ 74,000 Liabilities $ 45,000 Trade accounts receivable (net) 36,000 Chu, capital 120,000 Plant assets (net) 135,000 Dow, capital 60,000 Goodwill (net) 30,000 Eng, capital 50,000 Total $275,000 Total $275,000 Chu, Dow, and Eng share net income and losses in the ratio of 3 : 2 : 1, respectively.
Instructions Prepare journal entries to record Eng’s withdrawal from the Chu, Dow & Eng LLP on July 10, 2005, under each of the following independent assumptions:

a. Eng is paid $54,000, and the excess paid over Eng’s capital account balance is recorded as a bonus to Eng from Chu and Dow.

b. Eng is paid $45,000, and the difference is recorded as a bonus to Chu and Dow from Eng.

c. Eng is paid $45,000, and goodwill currently in the accounting records of the partnership, which arose from Chu’s original investment of a highly profitable proprietorship, is reduced by the total amount of impairment implicit in the transaction.

d. Eng accepts cash of $40,500 and plant assets (equipment) with a current fair value of $9,000. The equipment had cost $30,000 and was 60% depreciated, with no residual value. (Record any gain or loss on the disposal of the equipment in the partners’ capital accounts.)