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EI Paso Physicians is a partnership of three doctors. The partners share profits and losses in the ratio of 20% to Juan Hernandez, 40% to
EI Paso Physicians is a partnership of three doctors. The partners share profits and losses in the ratio of 20% to Juan Hernandez, 40% to Rosa Garcia, and 40% to Eva Cahill. At December 31, 2008, the firm has the following balance sheet: Garcia withdraws from the partnership on December 31, 2008, to establish her own medical practice. Requirements Record Garcia's withdrawal from the partnership under the following plans: 1. In a personal transaction, Garcia sells her to Maria Martinez, who pays Garcia #100,000 for her interest. Hernandez and Cahill accept Martinez as a partner. (pp. 608-610) 2. The partnership pays Garcia cash of $20,000 and gives her a note payable for the remainder of her book quality in settlement of her partnership interest. (pp. 608-611) 3. The partnership pays Garcia cash of $8,000. (pp. 610-611) 4. The partners agree that the building is worth only $70,000. After the revaluation, the partnership settles with Garcia by giving her cash of $10,000 and a note payable for the remainder of her book equity. (pp. 608-611)
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