Sugino and Rio formed a partnership on July 1, 2022. Sugino invested P20,000 cash, inventory valued at P15,000, and equipment valued at P67,000. Rio invested P50,000 cash and land valued at P120,000. The partnership assumed the P40,000 mortgage on the land.

On June 30, 2023, the partnership reported a net loss of P24,000. The partnership contract specified that income and losses were to be allocated by allowing 10% interest on the original capital investment, salaries of P15,000 to Sugino and P20,000 to Rio, and the remainder to be divided in the ratio of 40:60.

On July 1, 2023, Hayami was admitted into the partnership with a P70,000 cash investment. Hayami was given a 30% interest in the partnership because of his special skills. The partner elect to use the bonus method to record the admission. Any bonus should be divided in the old ratio of 40:60.

On June 30, 2024, the partnership reported net income of P150,000. The new partnership contract stipulated that income and losses were to be divided in a fixed ratio of 20:50:30.

On July 2, 2024, Sugino withdrew from the partnership for personal reasons. Sugino was given P40,000 cash and a P60,000 note for his capital interest.

Prepare journal entries for each of the following events. Show computations.

1. Distribution of the net income for the second year. 2. Withdrawal of Sugino from the partnership.