Additional Informationa) The partnership agreement states that Happy. Jolly and Merry share profits and lossesin the ratio 3:2:1b) The furniture and fittings were sold for $48.800.c) Only $39.900 of outstanding receivables were recovered.d) The payables were settled for $25,440.e) It was agreed between the partners that Merry could take a motor vehicle at a valuationof $9,000 in addition to his share of the profit. The motor vehicle had a net book value of$8,000. The other motor vehicles were sold for $29,500.The inventory was sold for $27,750.f)g) The loan was repaid in full on 1 December 2006.h) There were no outstanding interest payments on the loan.i) Expenses incurred in dissolving the partnership were $1,000.Required:Prepare the following accounts on dissolution:i.ii.Partners' accountsRealization accountCash and bank account 2. Happy. Jolly and Merry decide to dissolve their partnership on 1 December 2006 after beingin business for many years. The balance sheet of the partnership as at 30 November 2006was as follows:AssetsNon-current assetsFurniture and fittingsMotor vehiclesCurrent assetsInventoryReceivablesBankTotal assetsCapital and liabilitiesPartners' capital accountsHappyJollyMerryPartners' current accountsHappyJollyMerryLoanCurrent LiabilitiesPayablesTotal capital and liabilitiesHappy, Jolly and MerryBalance sheet as at 30 November 2008$25,00042,0006,00045,00030,00015,0009,7507,4506,300$50,00035,00085,00073,000158,00090,00023,50018,00026,500158.000

Dissolution of a partnership is an event when the partnership comes to an end. It may happen because…

2. Happy, Jolly and Merry decide to dissolve their partnership on 1 December 2006 after being in business for many years. The balance sheet of the partnership as at 30 November 2006 was as follows: Assets Non-current assets Furniture and fittings Motor vehicles Current assets Inventory Receivables Bank Total assets Capital and liabilities Partners' capital accounts Happy Jolly Merry Partners' current accounts Happy Jolly Merry Loan Current Liabilities Payables Total capital and liabilities Happy, Jolly and Merry Balance sheet as at 30 November 2008 $ 25,000 42,000 6.000 45,000 30,000 15.000 9,750 7,450 0.300 $ 50,000 35.000 85,000 73,000 158.000 90,000 23,500 18,000 20.500 158.000

2. Happy, Jolly and Merry decide to dissolve their partnership on 1 December 2006 after being in business for many years. The balance sheet of the partnership as at 30 November 2006 was as follows: Assets Non-current assets Furniture and fittings Motor vehicles Current assets Inventory Receivables Bank Total assets Capital and liabilities Partners' capital accounts Happy Jolly Merry Partners' current accounts Happy Jolly Merry Loan Current Liabilities Payables Total capital and liabilities Happy, Jolly and Merry Balance sheet as at 30 November 2008 $ 25,000 42,000 6.000 45,000 30,000 15.000 9,750 7,450 0.300 $ 50,000 35.000 85,000 73,000 158.000 90,000 23,500 18,000 20.500 158.000

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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