ILLUSTRATION 12. A, B and C are partners in a firm sharing profits and losses in the ratio of 2:2: 1. They decided to dissolve and appoint B to realise the assets and distribute the proceeds for which he is to receive as his remuneration 5% of the amounts ultimately paid to A and C but in lieu of this he is to bear all expenses of realisation. Balance Sheet of the firm on the date of dissolution is as under : Liabilities $ Assets Creditors A's Capital B's Capital 4,229 1,317 3,960 2,970 Debtors Less : Provision 211 4,018 1,872 Stock Cash 290 1,710 357 Other Assets C- (Overdrawn) 8,247 8,247 B informs of the following realisations : Debtors $ 3,462 ; Stock $ 1,444 ; Goodwill $ 50; Other Assets $ 914. Creditors which were not recorded in books are now paid $100. Expenses of realisation amount to his insolvency. Close books of the firm. 310. C is able to contribute only $ 100 beyond which he expresses

ILLUSTRATION 12. A, B and C are partners in a firm sharing profits and losses in the ratio of 2:2: 1. They decided to dissolve and appoint B to realise the assets and distribute the proceeds for which he is to receive as his remuneration 5% of the amounts ultimately paid to A and C but in lieu of this he is to bear all expenses of realisation. Balance Sheet of the firm on the date of dissolution is as under : Liabilities $ Assets Creditors A's Capital B's Capital 4,229 1,317 3,960 2,970 Debtors Less : Provision 211 4,018 1,872 Stock Cash 290 1,710 357 Other Assets C- (Overdrawn) 8,247 8,247 B informs of the following realisations : Debtors $ 3,462 ; Stock $ 1,444 ; Goodwill $ 50; Other Assets $ 914. Creditors which were not recorded in books are now paid $100. Expenses of realisation amount to his insolvency. Close books of the firm. 310. C is able to contribute only $ 100 beyond which he expresses

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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Question 1 Prepare the Statement of Changes in Equity for the year ended 28 February 2021. INFORMATIONThe information given below was extracted from the accounting records of Preston Traders, a partnership business withPresley and Tony as partners. The following must be taken into account:(a) The Statement of Comprehensive Income reflected a net profit of R900 000 on 28 February 2021.(b) The partners are entitled to interest at 12% p.a. on their capital balances.Note: Presley decreased his capital by R200 000 on 01 June 2020 whilst Tony increased his capital by R200 000 on 01 September 2020. These capital changes have been recorded. (d) Tony is entitled to a bonus equal to 5% of the net profit before any of the above appropriations have been taken into account.(e) The remaining profit/loss must be shared between Presley and Tony in the ratio 3:2 respectively.
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6.
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