Q3X, Y and Z were partners sharing profits in the proportion of 3:2:1. Y Retiresfrom the business. The Balance sheet of the firm on the date of retirement wasas followsLiabilitiesCreditorsBills PayableGeneral ReserveCapital AccountsXYZAmount (RO)120,000 Cash at Bank60,000 Stock90,000 Debtors LESS ProvisionAssets240,000 RO 3000180,000 Vehicle120,000 Machinery810,000It was agreed among the partnersGoodwill of the firm to be valued atProvision for Doubtful debts to be increased byOutstanding expenses to be brought into accountVehicle is to be depreciated byStock is to be depreciated byMachinery is to be appreciated byAmount (RO)30,00090,000120,000150,000420,000810,000144,0006,00011,40017.5%12.5%7.5%Record the necessary Journal Entries and Prepare the necessary accountsand New Balance sheet of X and Z.

Retirement of a partner from the business warrants a myriad of entries. Plus, it involves various…

Answered: partners sharing profits

Business

Accounting

partners sharing profits

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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Q3 X, Y and Z were partners sharing profits in the proportion of 3:2:1. Y Retires from the business. The Balance sheet of the firm on the date of retirement was as follows Liabilities Creditors Bills Payable General Reserve Capital Accounts X Y Z Amount (RO) 60,000 30,000 Stock 45,000 Debtors LESS Provision 120,000 RO 1500 90,000 Vehicle 60,000 405,000 Assets Cash at Bank Machinery It was agreed among the partners Goodwill of the firm to be valued at Provision for Doubtful debts to be increased by Outstanding expenses to be brought into account Vehicle is to be depreciated by Stock is to be depreciated by Machinery is to be appreciated by Amount (RO 15,000 45,000 60,000 75,000 210,000 405,000 72,000 3,000 5,700 17.5% 12.5% 7.5% Record the necessary Journal Entries and Prepare the necessary accounts and New Balance sheet of X and Z.
A, B and C were partners sharing profits and losses in the proportion 5:3:2 respectively. Their balance sheet as at 31.3.2013 was - BALANCE SHEET as at 31.3.2013 Liabilities $ Assets 2,000 20,000 1,00,000 20,000 58,000 Creditors Bank 22,000 18,000 General Reserve Debtors Profit and Loss A/c A's Capital B's Capital C's Capital 10,000 50,000 50,000 Building Plant and Machinery Patents 50,000 2,00,000 2,00,000 On the same date C retired on following terms: - (i) Building is to be increased to 140%. (ii) Plant and Machinery to be decreased to 80%. (iii) $25,000 is to be transferred to C's loan and balance is to paid through bank. For this purpose loan is to be taken over from bank. (iv) The Capital of the entire firm is fixed at $ 1,50,000 and is to be divided amongst remaining partners in their new profit sharing ratio. The balance is to be adjusted through their current accounts. Prepare Revaluation Account, Partners' capital Accounts and Balance Sheet immediately after C's retirement.
A,B and C were partners sharing profits and losses 2:3:1. The position of the firm as on 1-4-2014 and 31-3-2015 was : 01/04/2014 31/03/2015 01/04/2014 31/03/2015 A's Capital B's Capital C's Capital General Reserve Capital Reserve Bank Overdraft Fixed Assets Debtors Stock Loans and Advances 20,000 18,000 30,000 28,000 40,000 36,000 40,000 37,000 65,000 22,000 10,000 9,000 20,000 30,000 72,000 32,000 12,000 12,000 10,000 1,22,000 5,000 1,52,000 On 1st April, 2014 the partners decided to change their profit and loss sharing ratio to 2:4:1. 1,22,000 1,52,000 Goodwill was valued at $ 42,000. No entries were, however, passed to give effect to this change. Pass Journal entries in the books of the firm as on 31st March, 2015 and prepare Capital Accounts of the Partners.
Q3 X, Y and Z were partners sharing profits in the proportion of 3:2:1. Y Retires from the business. The Balance sheet of the firm on the date of retirement was as follows Liabilities Creditors Bills Payable General Reserve Capital Accounts X Y Z Amount (RO) 80,000 Cash at Bank 40,000 Stock 60,000 Debtors LESS Provision 160,000 RO 2000 120,000 Vehicle 80,000 Assets 540,000 Machinery Amount (RO) 20,000 60,000 80,000 100,000 280,000 540,000 It was agreed among the partners Goodwill of the firm to be valued at Provision for Doubtful debts to be increased by Outstanding expenses to be brought into account Vehicle is to be depreciated by Stock is to be depreciated by Machinery is to be appreciated by Record the necessary Journal Entries and Prepare the necessary accounts and New Balance sheet of X and Z. 96,000 4,000 7,600 17.5% 12.5% 7.5%
M,Band/Aweretthree partnerssharing profits i int the ratio 2::2::11Their|Balance Sheetas at 31.3.2012 was as under: BALANCE SHEET as at 31.3.2012 Liabilities $ Assets $ General ReservE M's Capital B's Capital FAs Capital Creditors 28,000 30,000 20,000 10,000 25,000 17,500 4,C00 TZ1500 28,500 45,500 15,000 30,000 Casih Debtors Stock Land & Building Motor Vehicle Bilis Payable Goodwill 1,30,500 1,30,500 Bdied on 12th June, 2012. According to the deed, his legal representatives entitied ito: (fa) Batanceiin Capital A/c ((b) Shareof goodwill valued on the basis of thrice the averoge profits far ithe pastifourcompieted years. ((0) Shareinprofits upto the dote of death on the basis of average profits forthe pastifour completet yeurs. ((d) ifntereston capital@ 18% p.a. Profits forithe yearsending on/March 31“ of 2009, 2010, 2011 and2012 respectively.were $50,000, $E8,00, $40,000, $52,0ODirespectively. Theifirmihaitaken amatonvéhičteibutítwas mot recordetdi inthelhooksitillttate. The market…
A and B were partners sharing profit and losses in the ratio of 3/4 and 1/4 showed the following Balance Sheet at 31 st Dec 2014: BALANCE SHEET as at 31.12.2014 Liabilities $ Assets Creditors 30,000 Cash in Hand 25,000 General Reserve 16,000 Debtors 50,000 Capitals: Less: Provision 5,000 45,000 A 50,000 Bill Receivable 30,000 54,000 1,04,000 Stock 30,000 Fixtures 20,000 1,50,000 1,50,000 They admit C for th share on 1st Jan 2015, on the following terms: 5 (a) C was to introduce $ 40,000 as his capital. (b) C would pay cash for goodwill which would be based on 4 years' purchase of past profits of 5 years. (c) Assets were revalued as under : Fixtures at $ 15,000; Bills Receivables at $ 40,000; Stock at $ 20,000; Debtors at book value less a Provision of 20%. (d) Outside Liabilities were proved at $ 35,000, one Bill for goods purchased having been omitted from books. Profits for the last five years were as under: 2010 20,000 2011 15,000 2012 25,000 2013 10,000 2014 15,000 Prepare…
Lalitha, Jothi and Kanaga were partners of a firm sharing profit and losses in the ratio of 3:2:3. Set out below was their balance sheet as onMarch 31, 2021. Liabilities & Equity Bills Payable Sundry Creditors Outstanding Expenses Capital: RO Assets RO 80000 Cash in Hand 156250 Cash at Bank 1250 Debtors O Stock 1875 511250 222500 278750 Lalitha 500000 Furniture 43750 Jothi 312500 Plant and Machinery 121875 Kanaga 375000 Building 300000 Profits & Loss A/c 55000 1480000 1480000 Lalitha retired from the partnership on April 01, 2021 under the following terms: The assets are to be valued as under: Stock 250000 Furniture 37500 Plant & Machinery Building 112500 250000 A provision for doubtful debt to be created at 10625 Goodwill of the firm was to be valued at 75000 The gaining ratio is 2:3. Lalitha was to be paid off immediately. Record the necessary journal entries, prepare Revaluation Account, Capital Accounts and Balance Sheet of the reconstituted partnership.
2) V and K were partners sharing profits and losses as 60% to V and 40% to K. Their Balance Sheet as at 1st January, 2005 stood as under Balance Sheet Liabilities Amount Assets Amount Sundry creditors Bills Payable 96,000 Cash in Hand 4,000 56,000 34,000 Sundry debtors 40,000 Capital accounts: V: Stock Plant & machinery Land & Buildings 90,000 80,000 K: 80,000 170,000 120,000 300,000 300,000 The partners agreed to admit E into the firm subject to revaluation of the following items: (i) Stock was to be reduced by R.O 4.000 (ii) Land and Buildings were to be valued at R.O 160,000 (iii) A provisíon of 2 ½% was to be created for doubtful debtors (iv) A liability of R.O 2,600 for outstanding expenses had been omitted to be recorded in the books. E contributed R.O 60,000 as his share of capital. Required: Prepare the revaluation account, capital accounts and the balance sheet after the above adjustment. (Ans. Profit on Revaluation: R.O 32,000; Balance Sheet Total: R.O 334,600)
P, Q & R were partners sharing profits and losses in the ratio of 5:3:2. On 31st Dec. 2012 their Balance Sheet stood as follows: BALANCE SHEET as at 31.12.2012 Liabilities $ Assets $ Sundry Creditors General Reserve Capitals - 1,40,000 1,40,000 17,500 5,25,000 3,50,000 2,62,500 87,500 1,92,500 1,05,000 Cash at Bank Debtors Stock Machinery Building Patents 5,25,000 4,37,500 2,62,500 12,25,000 Goodwill 15,22,500 15,22,500 R died on 31st March 2013, the following adjustments were made: (a) Goodwill be valued at 2½ years' purchase of the average profits of last four years, The profits for the last four years were as under: 2009 – $ 2,27,000; 2010 – $ 2,10,000; 2011 - $ 2,80,000; 2012 – $ 2,60,000 (b) Machinery be valued at $ 2,90,000; Patents be valued at $ 4,97,500; Building be valued at $ 4,37,500. (c) For the purpose of calculating R's share in the profits, profits of 2013 should be taken to have accrued on the basis of profits of 2012. Calculate the amount payable to the executors of…
Read and analyze the following problem and answer the questions asked. Show your computations. Cash Non-Cash assets PO 85,000 P 85,000 Total Assets Liabilities Loan payable to Partner F Loan payable to Partner G F, Capital (60% in P/L) G, Capital (40% in PIL) Total Liabilities and Equity 25,000 11,000 16,000 21,000 12,000 P 85,000 Case # 1: Lump-sum liquidation All the non-cash assets are sold for P53,000. Case # 2: Installment Liquidation The non-cash assets are sold in installments. Settlement of partners' claims shall be made in installments as cash becomes available. In the first sale, three-fourths (3/4) of the non-cash assets are sold for P46,000. Case # 3: Installment Liquidation The non-cash assets are sold in installments. Settlement of partners' claims shall be made in installments as cash becomes available. In the first sale, 90% of the non-cash assets are sold for P60,000. 1. Under Case # 1: how much is the amount distributable to F? а. Р13,800 b. P12,800 c. P14,800 d.…
Orion, Leanna and Aric were partners sharing profits and losses in the proportion of 2:2:1, following is their Balance Sheet as on 31st March, 2008. Balance Sheet as on 31 March, 2008 Assets Liabilities Capital Accounts: Orion Leanna Aric General Reserve Creditors Orion's Loan A/c Bills payable Amount $ Machinery 30,000 Stock 10,000 Debtors 10,000 Loss: R.D.D. 3,000 Investment 20,000 Profit and Loss A/c 4,000 Bank 7,000 84,000 27,500 1,500 2) Dissolution expenses were $ 1,500. 3) Goodwill of the firm realised $ 12,000 Pass the necessary Journal entries in the books of the firm. Amount $ 25,000 10,000 26,000 12,000 9,000 2,000 84,000 On the above date the partners decided to dissolve the firm: 1) Assets were realised: Machinery $ 22,500, Stock $9,000, Investment $ 10,500, Debtors $ 22,500.
A, B and C were partners in a busines sharing profits equally, C retires on 1.1.2012, when the Balance Sheet stood as follows: BALANCE SHEET as at 1.1.2012 Liabilities Assets $ Bills Payable 2,000 Cash at Bank 3,750 Creditors 350 Bills Receivable 2,500 General Reserve 7,500 Debtors 6,300 Profit and Loss A/c 3,000 Stock in Trade 700 Capitals - Furniture & Fixtures 4,000 Building & Land Deferred Revenue Expenditure A 7,500 16,350 B 8,250 3,000 8,000 (Advertisement) 36,600 36,600 The goodwill of the firm is valued at $ 11,250. Amount payable to C is transferred to his loan account which will be paid in three equal annual installment together with interest @ 10% p.a. Show the Retiring Partner's Capital Account and his Loan Account till it is paid off. Books of accounts are closed on 31st December every year.