12,400 16,320 Goodwill Plant and machinery Stock Debtors Cash at bank 6,420 4,100 626 11,146 ( 5,928) Sundry creditors 5,218 33,938 Capital: Fitch Wall 19,461 14,477 33,938 On 1 January 20X3, they decided to admit Home as a partner on the condition that she contributed £12,000 as her capital but that the plant and machinery and stock should be revalued at £16,800 and £6,100 respectively, the other assets excepting goodwill, remaining at their book values. The goodwill was agreed to be valueless. You are required to show: (a) The ledger entries dealing with the above in the following accounts: (i) Goodwill account, (ii) Revaluation accounts, (iii) Capital accounts; (b) The balance sheet of the partnership immediately after the admission of Home.
12,400 16,320 Goodwill Plant and machinery Stock Debtors Cash at bank 6,420 4,100 626 11,146 ( 5,928) Sundry creditors 5,218 33,938 Capital: Fitch Wall 19,461 14,477 33,938 On 1 January 20X3, they decided to admit Home as a partner on the condition that she contributed £12,000 as her capital but that the plant and machinery and stock should be revalued at £16,800 and £6,100 respectively, the other assets excepting goodwill, remaining at their book values. The goodwill was agreed to be valueless. You are required to show: (a) The ledger entries dealing with the above in the following accounts: (i) Goodwill account, (ii) Revaluation accounts, (iii) Capital accounts; (b) The balance sheet of the partnership immediately after the admission of Home.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:43.2A Fitch and Wall have been in partnership for many years sharing profits and losses in the
ratio 5:3 respectively. The following was their balance sheet as at 31 December 20X2.
Chapter 43 • Revaluation of partnership asse
£
Goodwill
Plant and machinery
Stock
Debtors
Cash at bank
12,400
16,320
6,420
4,100
626
11,146
( 5,928)
Sundry creditors
5,218
33,938
Capital: Fitch
Wall
19,461
14,477
33,938
On 1 January 20X3, they decided to admit Home as a partner on the condition that she contributed
£12,000 as her capital but that the plant and machinery and stock should be revalued at £16,800
and £6,100 respectively, the other assets excepting goodwill, remaining at their book values. The
goodwill was agreed to be valueless.
You are required to show:
(a) The ledger entries dealing with the above in the following accounts:
(i) Goodwill account,
(ii) Revaluation accounts,
(iii) Capital accounts;
(b) The balance sheet of the partnership immediately after the admission of Home.
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