Regarding the enclosed image,1. What is the correct balance in the capital account of Johannes after the valuation of assets and prior to the admission of Mqithwa?2. What is the correct amount of goodwill in the accounting records of KwaQongo Farmers after the admission of Mqithwa? Mrebe and Johannes are in a partnership trading as KwaQongo Farmers. Thepar tners are sharing profits and losses equally. On 30 July 20.1 the followinginformation was extracted from the accounting records of the par tnership:EXTRACT OF GIVEN INFORMATION FOR KWAQONGO FARMERSCapital - Mrebe...Capital - Johannes..Current account - Mrebe (Cr)..Current account- Johannes (Dr).R124 5001103004540028400Mrebe and Johannes decided to admit Mqithwa from 1 August 20.1.Mqithwa will contribute the following to acquire a fifth of the net asset shareof the partnership1. Cash..21300580002. Farming equipment worth..Mrebe and Johannes agreed to relinquish 20% of their share in profits orlosses to Mqithwa in the ratio of 3:1 respectivelyAll other assets were revalued before admitting Mqithwa to the partnership.A valuation loss was correctly calculated at...44000

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1. What is the correct balance in the capital account of Johannes after the valuation of assets and prior to the admission of Mqithwa? 2. What is the correct amount of goodwill in the accounting records of KwaQongo Farmers after the admission of Mqithwa?

1. What is the correct balance in the capital account of Johannes after the valuation of assets and prior to the admission of Mqithwa? 2. What is the correct amount of goodwill in the accounting records of KwaQongo Farmers after the admission of Mqithwa?

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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Question

Regarding the enclosed image,

1. What is the correct balance in the capital account of Johannes after the valuation of assets and prior to the admission of Mqithwa?

2. What is the correct amount of goodwill in the accounting records of KwaQongo Farmers after the admission of Mqithwa?

Mrebe and Johannes are in a partnership trading as KwaQongo Farmers. The
par tners are sharing profits and losses equally. On 30 July 20.1 the following
information was extracted from the accounting records of the par tnership:
EXTRACT OF GIVEN INFORMATION FOR KWAQONGO FARMERS
Capital - Mrebe...
Capital - Johannes..
Current account - Mrebe (Cr)..
Current account- Johannes (Dr).
R
124 500
110300
45400
28400
Mrebe and Johannes decided to admit Mqithwa from 1 August 20.1.
Mqithwa will contribute the following to acquire a fifth of the net asset share
of the partnership
1. Cash..
21300
58000
2. Farming equipment worth..
Mrebe and Johannes agreed to relinquish 20% of their share in profits or
losses to Mqithwa in the ratio of 3:1 respectively
All other assets were revalued before admitting Mqithwa to the partnership.
A valuation loss was correctly calculated at...
44000

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

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