Answered: business. The following is the Balance…

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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Roudha and Samah were started a perfume business. The following is the Balance Sheet as on 31/12/2020, they share profits in the ratio of 1:1 Liabilities Amount Assets Amount Sundry Creditors 20,000 Cash in Hand 20,000 Capital Account Roudha 20,000 Samah 20,000 40,000 Debtors 10,000 Stock 10,000 Furniture 5,000 Plant and Machinery 15,000 Total 60,000 Total 60,000 On 31-12-2020 Reem is admitted into the partnership on the following terms: That Reem is to bring in OMR 25,000 as capital and OMR 10,000 as premium for goodwill for 1/3rd share. That the value of stock is reduced by 5%, while plant & machinery is appreciated by 5%. That furniture is devalued at OMR 4,000. That a provision for doubtful debt is to be created on sundry debtors at 3 % . Investment worth OMR 2, 000 (not mentioned in the balance sheet) is to be taken into account. Which all the journal entries they may enter in the company books

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