Adjani, Malcolm, and Shanice have been in partnership for over forty years. They are now ready to retire and have decided to dissolve the partnership on March 31, 2021. The balance sheet at that date stood as follows: i. ii. iii. iv. V. ASSETS Non-current assets Buildings Furniture Statement of Financial Position as at 31 March Current assets Inventory Trade receivables Allowance for doubtful accounts Bank Total current assets Total assets C. EQUITY AND LIABILITIES Capital -Adjani Capital - Malcolm Capital - Shanice Current a/c - Adjani Current a/c - Malcolm Current a/c - Shanice Additional information: Long-Term Liabilities Loan Current Liabilities Creditors a. Buildings realized $180,000 b. Debtors $233, 600 c. Inventory $83,000 Required: Prepare the following: A. Realization account B. Partners' capital accounts $ Bank account 2020 250,000 15,000 242,000 (12,000) $ 50,000 3,000 83,000 Adjani took over the furniture at an agreed value of $10,000 Of the remaining assets: 230,000 35,000 155,000 (130,000) $ 200,000.00 12,000.00 212,000.00 240,000 80,000 80,000 400,000.00 348,000 560,000.00 60,000 85,000.00 Adjani took over the creditors and Shanice assumed responsibility for the loan Dissolution expenses amounted to $2,200 Malcolm has been ill for a long period and is now insolvent due to his high medical bills 15,000.00 60,000.00 560,000.00
Adjani, Malcolm, and Shanice have been in partnership for over forty years. They are now ready to retire and have decided to dissolve the partnership on March 31, 2021. The balance sheet at that date stood as follows: i. ii. iii. iv. V. ASSETS Non-current assets Buildings Furniture Statement of Financial Position as at 31 March Current assets Inventory Trade receivables Allowance for doubtful accounts Bank Total current assets Total assets C. EQUITY AND LIABILITIES Capital -Adjani Capital - Malcolm Capital - Shanice Current a/c - Adjani Current a/c - Malcolm Current a/c - Shanice Additional information: Long-Term Liabilities Loan Current Liabilities Creditors a. Buildings realized $180,000 b. Debtors $233, 600 c. Inventory $83,000 Required: Prepare the following: A. Realization account B. Partners' capital accounts $ Bank account 2020 250,000 15,000 242,000 (12,000) $ 50,000 3,000 83,000 Adjani took over the furniture at an agreed value of $10,000 Of the remaining assets: 230,000 35,000 155,000 (130,000) $ 200,000.00 12,000.00 212,000.00 240,000 80,000 80,000 400,000.00 348,000 560,000.00 60,000 85,000.00 Adjani took over the creditors and Shanice assumed responsibility for the loan Dissolution expenses amounted to $2,200 Malcolm has been ill for a long period and is now insolvent due to his high medical bills 15,000.00 60,000.00 560,000.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Question
Transcribed Image Text:Adjani, Malcolm, and Shanice have been in partnership for over forty years. They are now ready
to retire and have decided to dissolve the partnership on March 31, 2021. The balance sheet at
that date stood as follows:
iii.
iv.
ASSETS
Non-current assets
Buildings
Furniture
Statement of Financial Position
as at 31 March
Current assets
Inventory
Trade receivables
Allowance for doubtful accounts
A.
Bank
Total current assets
Total assets
EQUITY AND LIABILITIES
Capital -Adjani
Capital - Malcolm
Capital - Shanice
C.
Current a/c - Adjani
Current a/c - Malcolm
Current a/c - Shanice
Additional information:
Long-Term Liabilities
Loan
Current Liabilities
Creditors
Required:
Prepare the following:
a. Buildings realized $180,000
b. Debtors $233, 600
c. Inventory $83,000
Realization account
B. Partners' capital accounts
$
Bank account
2020
i. Adjani took over the furniture at an agreed value of $10,000
ii.
Of the remaining assets:
250,000
15,000
$
50,000 200,000.00
3,000
12,000.00
212,000.00
83,000
242,000
(12,000) 230,000
35,000
$
Adjani took over the creditors and Shanice assumed responsibility for the loan
Dissolution expenses amounted to $2,200
V. Malcolm has been ill for a long period and is now insolvent due to his high medical bills
348,000
560,000.00
240,000
80,000
80,000 400,000.00
155,000
(130,000)
60,000 85,000.00
15,000.00
60,000.00
560,000.00
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