A, Ben and Cathy have been in partnership for many years sharing profits and losses based on the ratio 2:2:1. They provided the following information. Statement of Financial Position As At 30 September 2021 Non-current assets Land and buildings Plant and machinery Motor vehicles 210,000 27,050 11.352 240,302 Current assets Inventory Trade receivables Bank 17.832 9,340 2548 29,518 278,820 Total assets Current liabilities Trade payables 22,840 Non-current liabilities Loan from Ali 75,000 (07,840) 180, 980 Capital accounts Ali Ben Cathy 80,000 00,000 20.000 180,000 Current accounts Ali Ben Cathy 12,735 10,873 (2.028) 20,080 180,080 On 30 September 2021, they decided to dissolve the partnership. The terms of the dissolution were: (1) Land and buildings were sold for £217,000. 2) Plant and machinery was sold for £25,000. 3) Motor vehicles were disposed of as follows: one to Ali and one to Ben at an agreed value of £4,000 each, with the remaining motor vehicies being sold for £5.000. 4) The inventory was sold for £18,478. Two customers who owed the partnership £500 and £450 were unable to settle their 5) debts. The remaining credit customers paid in full after receiving a 2% discount. All of the trade payables were paid after they allowed a 5% discount. The total costs of dissolution amounted to £2,250. (6)
A, Ben and Cathy have been in partnership for many years sharing profits and losses based on the ratio 2:2:1. They provided the following information. Statement of Financial Position As At 30 September 2021 Non-current assets Land and buildings Plant and machinery Motor vehicles 210,000 27,050 11.352 240,302 Current assets Inventory Trade receivables Bank 17.832 9,340 2548 29,518 278,820 Total assets Current liabilities Trade payables 22,840 Non-current liabilities Loan from Ali 75,000 (07,840) 180, 980 Capital accounts Ali Ben Cathy 80,000 00,000 20.000 180,000 Current accounts Ali Ben Cathy 12,735 10,873 (2.028) 20,080 180,080 On 30 September 2021, they decided to dissolve the partnership. The terms of the dissolution were: (1) Land and buildings were sold for £217,000. 2) Plant and machinery was sold for £25,000. 3) Motor vehicles were disposed of as follows: one to Ali and one to Ben at an agreed value of £4,000 each, with the remaining motor vehicies being sold for £5.000. 4) The inventory was sold for £18,478. Two customers who owed the partnership £500 and £450 were unable to settle their 5) debts. The remaining credit customers paid in full after receiving a 2% discount. All of the trade payables were paid after they allowed a 5% discount. The total costs of dissolution amounted to £2,250. (6)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Question
Prepare the
Transcribed Image Text:Ali, Ben and Cathy have been in partnership for many years sharing profits and losses based on
the ratio 2:2:1. They provided the following information.
Statement of Financial Position As At 30 September 2021
Non-current assets
Land and buildings
Plant and machinery
Motor vehicles
210,000
27,950
11,352
240,302
Current assets
Inventory
Trade receivables
Bank
17,632
9,340
2,548
29,518
278,820
Total assets
Current liabilities
Trade payables
22,840
Non-current liabilities
Loan from Ali
75,000
(97,840)
180, 980
Capital accounts
Ali
80,000
60,000
20,000
Ben
Cathy
180,000
Current accounts
Ali
12,735
10,873
(2,628)
Ben
Cathy
20,980
180,980
On 30 September 2021, they decided to dissolve the partnership. The terms of the dissolution
were:
(1)
(2)
(3)
Land and buildings were sold for £217,000.
Plant and machinery was sold for £25,000.
Motor vehicles were disposed of as follows: one to Ali and one to Ben at an agreed value
of £4,000 each, with the remaining motor vehicles being sold for £5,000.
The inventory was sold for £18,478.
Two customers who owed the partnership £590 and £450 were unable to settle their
debts. The remaining credit customers paid in full after receiving a 2% discount.
All of the trade payables were paid after they allowed a 5% discount
The total costs of dissolution amounted to £2,250.
(4)
(5)
(8)
(7)
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