Mary, Jane and Susan are in partnership sharing profits and losses in the ratio 2:2:1 respectively. The following was their balance sheet as at 31 December 2018: Cost Depreciation. NBV Non-Current Assets $ $ $ Premises 42,000 32,000 10,000 Motor Vehicles 14,000 10,000 4,000 Furniture and Fittings 6,000 2,000 4,000 62,000 44,000 18,000 Current Assets Inventory 24,000 Trade Receivables 6,800 30,800 48,800 Capital and Liabilities Capitals: Mary 7,000 Jane 7,000 Susan 4,000 18,000 Current A/cs Mary 6,800 Jane 5,000 Susan 3,400 15,200 33,200 Loan from Toby 6,000 Current Liabilities: Trade Payables 7,800 Bank overdraft 1,800 9,600 48,800 On 31 December 2018 the partners decide to terminate the business. The following took place: i. Mary took over one of the motor vehicles for $5,000 ii. Stock was taken over by Susan for $12,000 iii. Premises, inventory, the remaining motor vehicles, furniture and fittings were sold for $9000, $12000, $1000 and $1000 respectively iv. Receivables realised $6,450 and Payables were paid in full v. Dissolution Expenses amounted to $100 vi. Susan was declared insolvent and was unable to repay the amount owed to the partnership. The partnership was terminated on December 31, 2018 A. You are required to prepare the following accounts to record the termination of the partnership: i. Realisation Account ii. Bank Account iii. Partners’ Capital Account
Mary, Jane and Susan are in
The following was their
Cost
Non-Current Assets $ $ $
Premises 42,000 32,000 10,000
Motor Vehicles 14,000 10,000 4,000
Furniture and Fittings 6,000 2,000 4,000
62,000 44,000 18,000
Current Assets
Inventory 24,000
Trade Receivables 6,800 30,800
48,800
Capital and Liabilities
Capitals: Mary 7,000
Jane 7,000
Susan 4,000 18,000
Current A/cs Mary 6,800
Jane 5,000
Susan 3,400 15,200
33,200
Loan from Toby 6,000
Current Liabilities:
Trade Payables 7,800
Bank overdraft 1,800 9,600
48,800
On 31 December 2018 the partners decide to terminate the business. The following took place:
i. Mary took over one of the motor vehicles for $5,000
ii. Stock was taken over by Susan for $12,000
iii. Premises, inventory, the remaining motor vehicles, furniture and fittings were sold for
$9000, $12000, $1000 and $1000 respectively
iv. Receivables realised $6,450 and Payables were paid in full
v. Dissolution Expenses amounted to $100
vi. Susan was declared insolvent and was unable to repay the amount owed to the
partnership. The partnership was terminated on December 31, 2018
A. You are required to prepare the following accounts to record the termination of the
partnership:
i. Realisation Account
ii. Bank Account
iii. Partners’ Capital Account
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