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

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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