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a) Prepare the Capital Account b) Prepare the Realization Account c) Prepare Linda Co. Account d) Prepare the Bank Account

a) Prepare the Capital Account b) Prepare the Realization Account c) Prepare Linda Co. Account d) Prepare the Bank Account

FINANCIAL ACCOUNTING
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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Please no coping from another site. Show the necessary workings on how you derived your answers. 

Answer all questions a to d. 

 

Mintah and Hudah are in partnership, sharing profits and losses in the ratio 3:2. Their financial position as at 31s* December 2018 is as follows: GHC GHC GHC Non-current Assets: Freehold Premises: cost 30,000 Fixtures and Fittings: Cost 5,000 Depreciation 4,000 1,000 Motor Vehicle: Cost 4,000 Depreciation 1,000 3,000 34,000 Current Assets: Receivables 20,000 Cash at Hand 600 20,600 Total Assets 54,600 Capital and Liabilities: Capital accounts Mintah 20,000 Hudah 2,500 22,500 Current accounts: Mintah 3,000 Hudah 500 3,500 Non-current Liabilities: Loan: Mintah 16,000 Current liabilities: Payables 12,600 Total liabilities 54,600
Transcribed Image Text:Mintah and Hudah are in partnership, sharing profits and losses in the ratio 3:2. Their financial position as at 31s* December 2018 is as follows: GHC GHC GHC Non-current Assets: Freehold Premises: cost 30,000 Fixtures and Fittings: Cost 5,000 Depreciation 4,000 1,000 Motor Vehicle: Cost 4,000 Depreciation 1,000 3,000 34,000 Current Assets: Receivables 20,000 Cash at Hand 600 20,600 Total Assets 54,600 Capital and Liabilities: Capital accounts Mintah 20,000 Hudah 2,500 22,500 Current accounts: Mintah 3,000 Hudah 500 3,500 Non-current Liabilities: Loan: Mintah 16,000 Current liabilities: Payables 12,600 Total liabilities 54,600
Linda Co. is incorporated for the purpose of taking over the business. It is to acquire the Freehold Premises at a valuation of Ghc40,000 and the other assets (with the exception of cash and motor vehicles) at carrying amount. These values are to be introduced to Linda Co. books. The current liabilities are also taken over by the new company. The purchase consideration of Ghc60,000 is to be settled by 30,000 Ghc1 ordinary shares in Linda Co. and cash of Ghc30,000 obtained by a bank overdraft. Hudah is to take over both cars at a valuation of Ghc2,500 and the partners have agreed to divide the shares in their profit and loss sharing ratio. Mintah's loan is to be repaid in cash by the partnership. a) Prepare the Capital Account b) Prepare the Realization Account c) Prepare Linda Co. Account d) Prepare the Bank Account
Transcribed Image Text:Linda Co. is incorporated for the purpose of taking over the business. It is to acquire the Freehold Premises at a valuation of Ghc40,000 and the other assets (with the exception of cash and motor vehicles) at carrying amount. These values are to be introduced to Linda Co. books. The current liabilities are also taken over by the new company. The purchase consideration of Ghc60,000 is to be settled by 30,000 Ghc1 ordinary shares in Linda Co. and cash of Ghc30,000 obtained by a bank overdraft. Hudah is to take over both cars at a valuation of Ghc2,500 and the partners have agreed to divide the shares in their profit and loss sharing ratio. Mintah's loan is to be repaid in cash by the partnership. a) Prepare the Capital Account b) Prepare the Realization Account c) Prepare Linda Co. Account d) Prepare the Bank Account
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