AFAF024 Introductory Financial Accounting 2 Trimester 2, 2024/2025

TUTORIAL QUESTIONS
TOPIC 6: ACCOUNTING OF PARTNERSHIP
PART 3: DISSOLUTION OF PARTNERSHIP

Question 1
Andrew, Borhan and Chia are partners sharing profit and loss 4:3:1 respectively. Due to a
misunderstanding on 1 April 2021, they decided to dissolve the partnership. The following is the
Statement of Financial Position of the partnership as at 31 March 2021.
Statement of Financial Position as at 31 March 2021
RM RM RM
FIXED ASSETS
Building 90,000
Vehicles 60,000
Less: Provision for depreciation (15,000) 45,000
Furniture 20,000
Less: Provision for depreciation (8,000) 12,000 147,000

CURRENT ASSETS
Stocks 9,000
Debtors 13,000
Less: Provision for doubtful debts (1,000) 12,000
Bank 8,400 29,400
TOTAL ASSETS 176,400
CAPITAL ACCOUNT
Andrew 60,000
Borhan 45,000
Chia 15,000 120,000
CURRENT ACCOUNT
Andrew 10,500
Borhan 7,500
Chia (18,000) -
LONG-TERM LIABILITY
Loan from Andrew 27,000
CURRENT LIABILITY
Creditors 29,400
TOTAL EQUITY AND LIABILITIES 176,400

Additional information:

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AFAF024 Introductory Financial Accounting 2 Trimester 2, 2024/2025

1. The building was sold for RM120,000.

Required:

Prepare the following accounts:

(a) Realization account

(b) Partners' capital account. (in columnar form)

(c) Bank account

(Round up your answer to two-decimal point)

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AFAF024 Introductory Financial Accounting 2 Trimester 2, 2024/2025

Question 2
Jasmin, Melor and Kenanga were in partnership sharing profits and losses in the ratio of 4:4:1. On
31 December 2020, they decided to dissolve the partnership and the Statement of Financial
Position as at that date was as follows:
Statement of Financial Position as at 31 December 2020
RM RM
Non-current Assets
Motor Vehicles 30,000
Land and Buildings 83,000
Office Equipment 20,000 133,000

Current Assets
Inventory 17,000
Accounts Receivable 40,000
Bank 60,000 117,000
250,000

Current Liability
Accounts Payable 30,000

Non-current Liability
Loan 20,000

Capital Accounts
Jasmin 60,000
Melor 60,000
Kenanga 30,000 150,000

Current Accounts
Jasmin 60,000
Melor 30,000
Kenanga (40,000) 50,000
250,000
Additional information:
On the same day partners decide to dissolve the partnership. Business assets and liabilities were
disposed or settled as follows:
1. The following assets were sold:
RM
Inventories 18,000
Office Equipment 6,000
Land and Buildings 112,000
2. Collections from debtors are subject to bad debts of RM4,000.

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AFAF024 Introductory Financial Accounting 2 Trimester 2, 2024/2025

3. One of the motor vehicles was taken over by Jasmin at book value of RM15,000 and the
other was sold for RM10,000.
4. All the creditors were paid after deducting discounts received of RM2,000.
5. The loan was paid in full.
6. Realization expenses amounting to RM3,000 were paid.
7. Kenanga was declared bankrupt and had only managed to contribute RM2,000 to cover
her capital account’s deficit. The deficiency are to be borne between Jasmin and Melor
based on the Garner vs Murray rule.

Required:

Prepare the following accounts:

(a) Realization account.

(b) Partners' capital account. (in columnar form) .

(c) Bank account.

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