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Ch2b Example 2 QA

The document presents a balance sheet for a partnership between John, Peter, and Tom as of December 31, 20X6, detailing their assets, liabilities, and capital contributions. It outlines the disposal of assets and liabilities, including the sale of premises, transfer of inventory and motor vehicles, debt collection, and settlement of accounts payable. The task is to prepare the necessary accounts to close the partnership's books based on these transactions.

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12 views

Ch2b Example 2 QA

The document presents a balance sheet for a partnership between John, Peter, and Tom as of December 31, 20X6, detailing their assets, liabilities, and capital contributions. It outlines the disposal of assets and liabilities, including the sale of premises, transfer of inventory and motor vehicles, debt collection, and settlement of accounts payable. The task is to prepare the necessary accounts to close the partnership's books based on these transactions.

Uploaded by

fuyunshen
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Partnership (II)/p.

Example 2
John, Peter and Tom were partners sharing profits and losses in the ratio 1:1:3. The
balance sheet as at 31 December 20X6 was as follows:
Balance Sheet as at 31 December 20X6
Provision for
Cost Depreciation NBV
Non-Current Assets $ $ $
Premises 180,000 10,000 170,000
Motor Vehicles 27,500 5,500 22,000
207,500 15,500 192,000
Current Assets
Inventory 68,250
Accounts Receivable 172,500
Less: Provision for Bad Debts 1,265 171,235
Bank 26,065
265,550
Less: Current Liabilities
Accounts Payable 60,000
Working Capital 205,550
397,550
Financed by:
Capital
John 100,000
Peter 40,000
Tom 160,000 300,000

Current Accounts
John 30,000
Peter (10,000)
Tom 70,000 90,000

Non-Current Liabilities
Loan from Tom 7,550
397,550

Assets and liabilities were disposed of as follows:


i. The premises were sold at $200,000 and legal charges from the sale amounted
to $10,000.
ii. Peter took over the inventory and motor vehicles at book value.
iii. Except for $2,500, all debts were collected.
iv. The accounts payable was discharged for $56,000.
v. Realization expenses of $10,000 were paid.
You are required to prepare necessary accounts to close the books of the
partnership.
Partnership (II)/p.2

Answer to Example 2
John, Peter and Tom
Partnership (II)/p.3

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