13:07 HOLY BIBLE QUESTION 1 (45 Marks) L↑ llll 65% Pelican, Flamingo and Dolphin are in a partnership and share profits or losses in the ratio 3:2:1. Pelican, Flamingo and Dolphin received salaries of N$120 000, N$100 000 and N$80 000 respectively as well as 10% interest on the opening balance of their capital. Pelican received an entertainment allowance of N$20 000. Seal is the general manager. PELICAN, FLAMINGO AND DOLPHIN PARTNERSHIP Statement of financial position as at 31 December 2022 ASSETS N$ N$ Non-current assets Land and building 420 000 100 000 Vehicles Total non-current assets Current assets Inventories Receivables Cash and cash equivalents Total current assets Total assets EQUITY AND LIABILITIES Equity Capital: Pelican Flamingo Dolphin Current account: Pelican Flamingo Dolphin Total equity Current liabilities Payables Total equity and liabilities 520 000 10 000 50 000 110 000 170 000 690 000 420 000 200 000 120 000 100 000 58 750 45 000 (10 000) 23 750 478 750 211 250 690 000 Additional information: On 31 December 2022, Pelican, Flamingo and Dolphin decide to admit Seal as a partner on the following conditions: Admission of Seal will be effective as from 01 January 2023. (i) (ii) Seal's contribution consists of a vehicle with a carrying amount of N$50 000, inventories N$50 000 and cash N$104 000. (iii) The partners of the partnership, Pelican, Flamingo and Dolphin, receive the same salaries and interest on capital as previously but Seal's salary is reduced to N$40 000, and no bonus or others allowances are allowed in the partnership Pelican, Flamingo and Dolphin and Seal. Seal receives 5% interest on capital. (iv) The abridged statement of income for the year ended 31 December 2022: N$ Services rendered 794 000 Salary: Seal (120 000) Bonus: Seal (72 000) Other expenses Profit (60 000) 5420 2 (v) (i) (ii) (!!!) (iv) Seal will receive 1/6 of the profit or losses and the profit sharing ratio of Pelican, Flamingo and Dolphin will remain the same. On the same day Dolphin decides to withdraw from the partnership under the following conditions: Dolphin's share must be divided amongst Pelican, Flamingo and Seal in the ratio 1:2:2. Land and buildings are valued at N$780 000 only for the purpose of Dolphin's withdrawal. Dolphin receives an EFT payment for his share of the partnership. The new partners Pelican, Flamingo and Seal's capital accounts must be in profit sharing ratio by using Seal's capital as basis. Surplus capital shall be paid back to partners and shortfall shall be paid in. YOU ARE REQUIRED TO: (a) Calculate the profit-sharing ratio of Pelican, Flamingo and Dolphin and Seal after the admission of Seal. (5 marks) (b) Calculate and journalise the adjustments to correct the profit distribution in the partnership Pelican, Flamingo and Dolphin and Seal. (10 marks) (c) Prepare the capital account of the partners in column form. (20 marks) (d) Prepare the statement of financial position of Pelican, Flamingo and Seal as at 31 December 2022 (10 marks) ||| Г