2) V and K were partners sharing profits and losses as 60% to V and 40% to K. Their Balance Sheet as at 1st January, 2005 stood as under Balance Sheet Liabilities Amount Assets Amount Sundry creditors Bills Payable Capital accounts: 90,000 96,000 34,000 Cash in Hand 4,000 Sundry debtors Stock 56,000 40,000 Plant & machinery | 80,000 Land & Buildings | 120,000 V: K: 80,000 | 170,000 300,000 300,000 The partners agreed to admit E into the firm subject to revaluation of the following items: (i) Stock was to be reduced by R.O 4.000 (ii) Land and Buildings were to be valued at R.O 160,000 (iii) A provision of 2 ½% was to be created for doubtful debtors (iv) A liability of R.O 2,600 for outstanding expenses had been omitted to be recorded in the books. E contributed R.O 60,000 as his share of capital. Required: Prepare the revaluation account, capital accounts and the

2) V and K were partners sharing profits and losses as 60% to V and 40% to K. Their Balance Sheet as at 1st January, 2005 stood as under Balance Sheet Liabilities Amount Assets Amount Sundry creditors Bills Payable Capital accounts: 90,000 96,000 34,000 Cash in Hand 4,000 Sundry debtors Stock 56,000 40,000 Plant & machinery | 80,000 Land & Buildings | 120,000 V: K: 80,000 | 170,000 300,000 300,000 The partners agreed to admit E into the firm subject to revaluation of the following items: (i) Stock was to be reduced by R.O 4.000 (ii) Land and Buildings were to be valued at R.O 160,000 (iii) A provision of 2 ½% was to be created for doubtful debtors (iv) A liability of R.O 2,600 for outstanding expenses had been omitted to be recorded in the books. E contributed R.O 60,000 as his share of capital. Required: Prepare the revaluation account, capital accounts and the

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2) V and K were partners sharing profits and losses as 60% to V and 40% to K. Their Balance Sheet as at 1st January, 2005 stood as under Balance Sheet Liabilities Amount Assets Amount Sundry creditors Bills Payable 96,000 Cash in Hand 4,000 56,000 34,000 Sundry debtors 40,000 Capital accounts: V: Stock Plant & machinery Land & Buildings 90,000 80,000 K: 80,000 170,000 120,000 300,000 300,000 The partners agreed to admit E into the firm subject to revaluation of the following items: (i) Stock was to be reduced by R.O 4.000 (ii) Land and Buildings were to be valued at R.O 160,000 (iii) A provisíon of 2 ½% was to be created for doubtful debtors (iv) A liability of R.O 2,600 for outstanding expenses had been omitted to be recorded in the books. E contributed R.O 60,000 as his share of capital. Required: Prepare the revaluation account, capital accounts and the balance sheet after the above adjustment. (Ans. Profit on Revaluation: R.O 32,000; Balance Sheet Total: R.O 334,600)
P, Q & R were partners sharing profits and losses in the ratio of 5:3:2. On 31st Dec. 2012 their Balance Sheet stood as follows: BALANCE SHEET as at 31.12.2012 Liabilities $| Assets $ 1,40,000 1,40,000 17,500 5,25,000 3,50,000 2,62,500 87,500 15,22,500 Sundry Creditors General Reserve Capitals - 1,92,500 1,05,000 Cash at Bank Debtors Stock 5,25,000 4,37,500 2.62,500 12,25,000 Machinery Building Q Patents Goodwill 15,22,500 R died on 31s' March 2013, the following adjustments were made: (a) Goodwill be valued at 2½ years' purchase of the average profits of last four years, The profits for the last four years were as under: 2009 – $ 2,27,000; 2010 – $ 2,10,000; 2011 - $ 2,80,000; 2012 – $ 2,60,000 (b) Machinery be valued at $ 2,90,000; Patents be valued at $ 4,97,500; Building be valued at $ 4,37,500. (c) For the purpose of calculating R's share in the profits, profits of 2013 should be taken to have accrued on the basis of profits of 2012. Calculate the amount payable to the executors…
M,Band/Aweretthree partnerssharing profits i int the ratio 2::2::11Their|Balance Sheetas at 31.3.2012 was as under: BALANCE SHEET as at 31.3.2012 Liabilities $ Assets $ General ReservE M's Capital B's Capital FAs Capital Creditors 28,000 30,000 20,000 10,000 25,000 17,500 4,C00 TZ1500 28,500 45,500 15,000 30,000 Casih Debtors Stock Land & Building Motor Vehicle Bilis Payable Goodwill 1,30,500 1,30,500 Bdied on 12th June, 2012. According to the deed, his legal representatives entitied ito: (fa) Batanceiin Capital A/c ((b) Shareof goodwill valued on the basis of thrice the averoge profits far ithe pastifourcompieted years. ((0) Shareinprofits upto the dote of death on the basis of average profits forthe pastifour completet yeurs. ((d) ifntereston capital@ 18% p.a. Profits forithe yearsending on/March 31“ of 2009, 2010, 2011 and2012 respectively.were $50,000, $E8,00, $40,000, $52,0ODirespectively. Theifirmihaitaken amatonvéhičteibutítwas mot recordetdi inthelhooksitillttate. The market…
2) V and K were partners sharing profits and losses as 60% to V and 40% to K. Their Balance Sheet as at 1st January, 2005 stood as under Balance Sheet Amount Assets Amount Liabilities Sundry creditors 96,000 Cash in Hand 4,000 Bills Payable 34,000 Sundry debtors 56,000 Capital accounts: Stock 40,000 V: 90,000 Plant & machinery 80,000 K: 80,000 120,000 170,000 Land & Buildings 300,000 300,000 The partners agreed to admit E into the firm subject to revaluation of the following items: (i) Stock was to be reduced by RO 4,000 (ii) Land and Buildings were to be valued at RO 160,000 (iii) A provision of 2.5 % was to be created for doubtful debtors (iv) A liability of RO 2,600 for outstanding expenses had been omitted to be recorded in the books. E contributed RO 60,000 as his share of capital. Required: Prepare the revaluation account, capital accounts and the balance sheet after the above adjustment.
Present in good accounting form AAA, BBB, and CCC are partners sharing profits and losses in the ratio of 5:3:2. During the year their investments and withdrawals are as follows: Investment of AAA, BBB and CCC for P200,000, P175,000 and P375,000 respectively. Withdrawals of AAA, BBB and CCC amounting to P125,000, P62,500 and P62,500 respectively. On December 31, 2021, the partners decided to liquidate their business. After exhausting partnership assets, liabilities of P125,000 remain unpaid. AAA is personally insolvent. The gain or loss on realization is: a. -125,000 b. 625,000 c. -625,000 d. 125,000
The following is the statement of financial position of PQR sharing profits and losses in the ratio of 3:2:1 as on 31st Dec 2010 Liabilities RO Assets RO Creditors Outstanding Expenses Bills Payable Capitals: P 28,000 Q 20,000 R 30,000 25,800 200 6,000 78,000 110,000 Cash Debtor and Stock Furniture Computer Building Patents 8,000 42,000 15,000 10,000 30,000 5,000 110,000 They admit S into the partnership on the following terms: - The value of computer reduced by 10% A part of value of Patents for RO 1000 became useless and it has to be reduced. Buildings to be revalued at RO 55,000 Furniture was depreciated by 10% S shall bring RO 25,000 as capital for ¼ share of future profits Calculate New Profit Sharing Ratio and Sacrificing Ratio Prepare Revaluation Account, Partner’s Capital Account and redraft the Statement of financial position after the admission.
The following is the statement of financial position of PQR sharing profits and losses in the ratio of 3:2:1 as on 31st Dec 2010 Liabilities RO Assets RO Creditors Outstanding Expenses Bills Payable Capitals: P 28,000 Q 20,000 R 30,000 25,800 200 6,000 78,000 110,000 Cash Debtor and Stock Furniture Computer Building Patents 8,000 42,000 15,000 10,000 30,000 5,000 110,000 They admit S into the partnership on the following terms: - 1. The value of computer reduced by 10% 2. A part of value of Patents for RO 1000 became useless and it has to be reduced. 3. Buildings to be revalued at RO 55,000 4. Furniture was depreciated by 10% 5. S shall bring RO 25,000 as capital for ¼ share of future profits a) Calculate New Profit Sharing Ratio and Sacrificing Ratio b) Prepare Revaluation Account, Partner’s Capital Account and redraft the Statement of financial position after the admission.
The following is the statement of financial position of PQR sharing profits and losses in the ratio of 3:2:1 as on 31st Dec 2010 Liabilities RO Assets RO Creditors Outstanding Expenses Bills Payable Capitals: P 28,000 Q 20,000 R 30,000 25,800 200 6,000 78,000 110,000 Cash Debtor and Stock Furniture Computer Building Patents 8,000 42,000 15,000 10,000 30,000 5,000 110,000 They admit S into the partnership on the following terms: - 1. The value of computer reduced by 10% 2. A part of value of Patents for RO 1000 became useless and it has to be reduced. 3. Buildings to be revalued at RO 55,000 4. Furniture was depreciated by 10% 5. S shall bring RO 25,000 as capital for ¼ share of future profits a) Calculate New Profit Sharing Ratio and Sacrificing Ratio b) Prepare Revaluation Account, Partner’s Capital Account and redraft the Statement of financial position after the admission. Answer: Revaluation Account…
A and B were partners sharing profit and losses in the ratio of 3/4 and 1/4 showed the following Balance Sheet at 31 st Dec 2014: BALANCE SHEET as at 31.12.2014 Liabilities $ Assets Creditors 30,000 Cash in Hand 25,000 General Reserve 16,000 Debtors 50,000 Capitals: Less: Provision 5,000 45,000 A 50,000 Bill Receivable 30,000 54,000 1,04,000 Stock 30,000 Fixtures 20,000 1,50,000 1,50,000 They admit C for th share on 1st Jan 2015, on the following terms: 5 (a) C was to introduce $ 40,000 as his capital. (b) C would pay cash for goodwill which would be based on 4 years' purchase of past profits of 5 years. (c) Assets were revalued as under : Fixtures at $ 15,000; Bills Receivables at $ 40,000; Stock at $ 20,000; Debtors at book value less a Provision of 20%. (d) Outside Liabilities were proved at $ 35,000, one Bill for goods purchased having been omitted from books. Profits for the last five years were as under: 2010 20,000 2011 15,000 2012 25,000 2013 10,000 2014 15,000 Prepare…
The following is the trail Balance of X and Y Co. as on March 31, 2021. The partners sharing profits and losses in the ratio 2:1. Prepare the Income Statement, Profit & Loss Appropriation A/c, Partners' Capital A/c and the Balance Sheet. Particulars Dr. Particulars Cr. 375000 x Capital A/c 112500 Y Capital A/c 50000 Sundry creditors 100000 Sales (net) 50000 Discount Land and Buildings Plant and Machinery 125000 75000 Wages 62500 Opening Stock of Finished Goods 812500 Opening Stock of Raw material Opening Stock of Work in Progress Sundry debtors 6250 45000 Provision for bad debts 3750 125000 Commission 3750 Y's Loan A/c 2250 25000 Carriage inwards 75000 Carriage outwards Factory Expenses 18750 Royalties 3750 Purchase of Raw material (net) 187500 16250 7250 10000 Factory rent & taxes Discount Office rent Insurance 5000 3750 18750 30000 20500 1185000 The following additional information is to be taken into consideration: Bad debts Office Expenses Salaries of works manager Cash at bank…
The following is the trail Balance of X and Y Co. as on March 31, 2021. The partners sharing profits and losses in the ratio 2:1. Prepare the Income Statement, Profit & Loss Appropriation A/c, Partners' Capital A/c and the Balance Sheet. Particulars Dr. Particulars Cr. Land and Buildings 187500 x Capital A/c 56250 Y Capital A/c 25000 Sundry creditors 50000 Sales (net) 25000 Discount 22500 Provision for bad debts 62500 37500 Plant and Machinery Wages 31250 Opening Stock of Finished Goods 406250 3125 Opening Stock of Raw material Opening Stock of Work in Progress 1875 Sundry debtors 62500 Commission 12500 Carriage inwards 1875 Y's Loan A/c 37500 Carriage outwards 1125 Factory Expenses 9375 Royalties 1875 Purchase of Raw material (net) 93750 Factory rent & taxes 8125 Discount 3625 Office rent 5000 Insurance 2500 Bad debts 1875 Office Expenses 9375 Salaries of works manager 15000 Cash at bank 10250 592500 The following additional information is to be taken into consideration: 592500…
A, and B are partners sharing profits in the ratio of 2:3. Their balance sheet shows machineryat ₹2,00,000; stock ₹80,000, and debtors at ₹1,60,000. C is admitted and the new profitsharing ratio is 6:9:5. Machinery is revalued at ₹1,40,000 and a provision is made fordoubtful debts @5%. A’s share in loss on revaluation amount to ₹20,000. Revalued value ofstock will be:(a) ₹62,000 (b) ₹1,00,000 (c) ₹60,000 (d) ₹98,000