A and S are partners sharing profit and loss in the ratio of 3:1.             Their Statement of Financial Position(Balance Sheet) stood as at 31.12.2020 as follows:                             A and  S  Partnership             Statement of Financial Position(Balance Sheet)             As at  31st December 2020                         ASSETS             Current Assets    Kshs'       Kshs'    Cash and Cash Equivalent          26,000    Investments          24,000    Prepaid Insurance             Debtors    26,000          Less Provision for Doubtful Debts          26,000    Inventories(stock)          40,000    Total Current Assets          116,000    Non Current Assets             Machinery             Less:Accumulated Depreciation    10,000       10,000                  Buildings    60,000          Less:Accumulated Depreciation    -         60,000                  Furniture    30,000          Less:Accumulated Depreciation    -         30,000    Goodwill             Total Non Current Assets          100,000    Total Assets          216,000                  LIABILITIES             Current Liabilities             Bills Payable          6,000    Creditors          20,000    Partner A Loan          5,000    Partner S Loan          5,000    Total Current Liabilities          36,000                  Non Current Liabilities                        -                 -                 -      Total Non Current Liabilities          -      Total Liabilities          36,000    NET ASSETS          180,000                  SHAREHOLDERS' FUNDS             Capital Account:  Partner  A          75,000    Capital Account:  Partner  S          25,000    General Reserves             Profit & Loss A/c          80,000                             180,000               -      Additional Information             On the above date (31.12.2020),the Partnership firm was dissolved.             The following additional information is available:             i). Debtors realized Kshs.22,600             ii.Inventory realized Kshs.39,000             iii. Buildings realized Kshs.66,000             iv. Partner A took over 50% of the Investment at 10% less than the book value and the remaining investment was sold at a gain of 20%             v. Furniture was taken over by Partner S at Kshs 32,000             vi. Realization expenses amounted to Kshs.12,000                                         Required             (a) Prepare Journal Entries for these adjusting transactions             (b) Prepare the Realization Account             (c) Prepare the Partners' Capital Accounts             (d) Prepare the Cash Account

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A and S are partners sharing profit and loss in the ratio of 3:1.            
Their Statement of Financial Position(Balance Sheet) stood as at 31.12.2020 as follows:            
             
  A and  S  Partnership          
  Statement of Financial Position(Balance Sheet)          
  As at  31st December 2020          
             
ASSETS            
Current Assets    Kshs'       Kshs'   
Cash and Cash Equivalent          26,000   
Investments          24,000   
Prepaid Insurance            
Debtors    26,000         
Less Provision for Doubtful Debts          26,000   
Inventories(stock)          40,000   
Total Current Assets          116,000   
Non Current Assets            
Machinery            
Less:Accumulated Depreciation    10,000       10,000   
             
Buildings    60,000         
Less:Accumulated Depreciation    -         60,000   
             
Furniture    30,000         
Less:Accumulated Depreciation    -         30,000   
Goodwill            
Total Non Current Assets          100,000   
Total Assets          216,000   
             
LIABILITIES            
Current Liabilities            
Bills Payable          6,000   
Creditors          20,000   
Partner A Loan          5,000   
Partner S Loan          5,000   
Total Current Liabilities          36,000   
             
Non Current Liabilities            
           -     
           -     
           -     
Total Non Current Liabilities          -     
Total Liabilities          36,000   
NET ASSETS          180,000   
             
SHAREHOLDERS' FUNDS            
Capital Account:  Partner  A          75,000   
Capital Account:  Partner  S          25,000   
General Reserves            
Profit & Loss A/c          80,000   
             
           180,000   
           -     
Additional Information            
On the above date (31.12.2020),the Partnership firm was dissolved.            
The following additional information is available:            
i). Debtors realized Kshs.22,600            
ii.Inventory realized Kshs.39,000            
iii. Buildings realized Kshs.66,000            
iv. Partner A took over 50% of the Investment at 10% less than the book value and the remaining investment was sold at a gain of 20%            
v. Furniture was taken over by Partner S at Kshs 32,000            
vi. Realization expenses amounted to Kshs.12,000            
             
             
Required            
(a) Prepare Journal Entries for these adjusting transactions            
(b) Prepare the Realization Account            
(c) Prepare the Partners' Capital Accounts            
(d) Prepare the Cash Account            
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