Ahmed and Wahid are partners sharing profits and losses in the ratio of 3:1. Their Balance sheet as on March 31, 2021 is as follows. Liabilities Amount (RO) Assets Amount (RO) Creditors 315000 Cash 26250 Bills Payable 105000 Debtors 367500 General Reserve 210000 Stock 157500 Capital: Plant 131250 Ahmed 420000 | Buildings 525000 Wahid 210000 Profit & Loss Ac 52500 Bank Overdraft 315000 | Equipment 315000 Total 1575000 Total 1575000 On April 01, 2021, they agreed to admit Khalid into the firm for 1/5th Share of future profits on the following terms: a) Building is revalued at 630000 b) Stock is revalued at 112875 c) Goodwill is raised at 210000 d) Provision for bad debts is to be made at 5% e) Khalid has to bring in a Capital 262500 f) Khalid was unable to bring the amount of goodwill

Ahmed and Wahid are partners sharing profits and losses in the ratio of 3:1. Their Balance sheet as on March 31, 2021 is as follows. Liabilities Amount (RO) Assets Amount (RO) Creditors 315000 Cash 26250 Bills Payable 105000 Debtors 367500 General Reserve 210000 Stock 157500 Capital: Plant 131250 Ahmed 420000 | Buildings 525000 Wahid 210000 Profit & Loss Ac 52500 Bank Overdraft 315000 | Equipment 315000 Total 1575000 Total 1575000 On April 01, 2021, they agreed to admit Khalid into the firm for 1/5th Share of future profits on the following terms: a) Building is revalued at 630000 b) Stock is revalued at 112875 c) Goodwill is raised at 210000 d) Provision for bad debts is to be made at 5% e) Khalid has to bring in a Capital 262500 f) Khalid was unable to bring the amount of goodwill

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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Ahmed and Wahid are partners sharing profits and losses in the ratio of 3:1. Their Balance sheet as on March 31, 2021 is as follows. Liabilities Amount (RO) Assets Amount (RO) Creditors 210000 Cash 17500 Bills Payable 70000 Debtors 245000 General Reserve 140000 Stock 105000 0 Plant 280000 Buildings Capital: 87500 Ahmed 350000 Wahid 140000 Profit & Loss Ac 35000 Bank Overdraft 210000 Equipment 210000 Total 1050000 Total 1050000 On April 01, 2021, they agreed to admit Khalid into the firm for 1/5th Share of future profits on the following terms: a) Building is revalued at 420000 b) Stock is revalued at 75250 c) Goodwill is raised at 140000 d) Provision for bad debts is to be made at 5% e) Khalid has to bring in a Capital 175000 f) Khalid was unable to bring the amount of goodwill Pass Journal Entries and Prepare Revaluation Account, Capital Accounts and the Balance Sheet of the reconstituted firm.
Tasneem and Nazreen were friends with similar hobbies. they formed a partneship with a written partnership agreement to trade in pastry and related products as Tasnaz’s Pastry. The following were extracted from their accounting records; Balances in the ledger at 30 June 2021 R Capital: Tas 407000 Capital: Naz 363000 Current account: Tas credit balance at 1 July 2020 8052 Current account: Naz: debit balance at 1 July 2020 2640 Drawings : Tas 88000 Drawings : Naz 140000 Profit for the year 438636 Additional Information:The partnership agreement provides for the following that needs to be taken into account:1. Partners are entitled to salaries as follows:• Tas – R8 000 per month,• Naz – R10 000 per month. 2. Interest on capital accounts are allowed at 12% per year on each partners capital on a pro-rata basis. Note the following that on 1 January 2021:• Tas decreased her capital account by R27 000; and• Naz increase her capital account by R17 000. 3. Interest at 10%…
On April 1, 2022, Guy Comeau and Amelie Lavoi formed a partnership in Ontario. Comeau Lavoi Contribution $304,000 cash $202,000 land $144,900 building Profit sharing $184,800 salary allowance 5% of original capital investments 5% of original capital investments 40% of remaining 60% of remaining Cash withdrawal March 20, 2023 $129,800 Net Income during the year was $509,600 and was in the Income Summary account.On April 1, 2023 Travis Roberts invested $139,400 and was admitted to the partnership for a 20% interest in equity.Required:1. Prepare journal entries for the following dates.a. April 1, 2022
EXERCISE 8-10. Problem Solving 2: Gain or loss on realization of non-cash assets; capital deficiency absorption. Joshua, Daniel, and Martha were partners sharing profit and losses in the ratio of 1:2:1, respectively. On March 15, 2019, they decided to liquidate. Capital balances of Joshua, Daniel, and Martha were P215,000, P75,000, and P85,000, respectively. Liabilities amounting to P100,000 had yet to be settled. Total assets, inclusive of P35,000 cash, totaled P475,000. All non-cash assets were sold for only 30% of their book values. Liquidating expenses of P5,000 were also incurred. It was also determined that all partners, except Daniel, were solvent. REQUIRED: 1. How much was the gain or loss on non-cash asset realization? 2. How much cash should Martha infuse to satisfy the liquidation process of the partnership?
How much cash should Ivan contribute?
9. On January 1, 2016, AB and QR agreed to form a partnership. The following are their assets and liabilities. Accounts QR P76,000 88,000 48,000 304,000 364,000 480,000 440,000 216,000 144,000 140,000 60,000 Cash Accounts Receivable Inventories Machinery. Accounts Payable Notes Payable AB P136,000 AB decided to pay-off his notes payable from his personal assets. It was also agreed that QR inventories were overstated by P24,000 and AB machinery was over-depreciated P20,000. QR is to invest/withdraw cash in order to receive a capital credit that is 20% more than AB's total net investment in the partnership. Immediately after formation, how much cash will be presented in the partnership' Statement of Financial Position? 9
The balance sheet for Coney, Honey, and Money partnership shows the following information as of December 31, 2015; Cash ₱40,000 Liabilities ₱100,000 Other assets 560,000 Coney, Loan 50,000 Coney, Capital 250,000 Honey, Capital 140,000 Money, Capital 60,000 ₱600,000 ₱600,000 Profit and loss ratio is 3:2:1 for Coney, Honey, and Money, respectively. Other assets were realized as follows: DATE CASH RECEIVED BOOK VALUE January 2016 ₱120,000 ₱180,000 February 2016 70,000 154,000 March 2016 250,000 226,000 Cash is distributed as assets are realized. Cash received by Money in January is: a.P4,000 b. P10,000 c. P20,000 d. None
A, B and C are partners sharing profits and losses in the ratio of 3 : 2 :1 respectively. With effect from 1.4.2015 they decided to share future profits equally. For this purpose the assets and liabilities were revalued as under : Particulars Old Values ($) Revised Values ($) 30,000 54,000 24,500 14,70,000 50,800 Furniture 28,000 Computers Land and Buildings Machinery Sundry Creditors 12,90,000 46,500 34,870 30,860 Prepare Revaluation Account and give necessary journal entries for recording the above changes in assets and liabilities.
Ratio Analyses for Victor and Maria Review the financial statements of Victor and Maria Hernandez and the financial ratios provided below. Balance Sheet for a Couple with Two Children-Victor and Maria Hernandez, January 1, 2018 Dollars Percent ASSETS Monetary Assets Cash on hand 1,200 0.3 Savings account 4,200 1.1 Victor's checking account 2,700 0.7 Maria's checking account 3,300 0.8 Tax refund due 700 0.2 Rent receivable 650 0.2 Total Monetary Assets $ 12,750 3.3% Tangible Assets Home 192,000 49.0 Personal property 9,000 2.3 Automobiles 9,500 2.4 Total Tangible Assets $ 210,500 53.7% Investment Assets Fidelity mutual funds 4,000 1.0 Scudder mutual fund 4,500 1.1 Ford Motor Company stock 2,500 0.6 New York 2038 bonds 4,100 1.0 Life insurance cash value 5,400 1.4 IRA accounts 34,400 8.8 Real estate investment 114,000 29.1…
Since 1s* January, 2011 A,B and C are equal partners. Their Balance Sheet as on 31-12-2014 is as follows: Liabilities Assets 40,000 Cash in hand Cash at Bank 60,000 Sundry Debtors Stock in Trade Plant & Machinery Land & Building Sundry Creditors Accumulated Balance in 15,000 25,000 40,500 24,500 Profit & Loss A/c Capital Accounts : 40,000 40,000 20,000 |1,00,000 |2,00,000 A 35,000 60,000 |2,00,000 (1) Accumulated balance in Profit and Loss Account as given in the Balance Sheet consists of the following: Profit of 2012 3 36,000, Loss of 2013 3 18,000, and Profit of 2014 3 42,000. Analysis of the books of accounts disclosed the following errors : (a) A machinery costing $ 12,000 purchased in 2013 was debited to Repairs Account. 10% depreciation on reducing balance method is provided on plant and machinery. (b) $1,080 being the fixed deposit interest due to the firm used by A for his personal (11) expenses in 2014. (c) Goods costing $ 12,000 gent on sale or return basis have been recorded…