Tanaka, Tiana and Tina are in partnership for the business T3 Enterprise. They are sharing profits and losses in the ratio 3:2:1 respectively. The balance sheet for the partnership as at June 30, 2021, is as follows:

Tina decides to retire from the business on June 30, 2021, and Tamoy is admitted as a partner on that date. The following matters are agreed:

i. Certain assets were revalued: Premises $120, 000; Plant $35 000; Inventory $54 179 ii. Provision is to be made for doubtful debts in the sum of $3 000.

iii. Goodwill is to be recorded in the books on the day Tina retires in the sum of $42 000.

The partners in the new firm do not wish to maintain a goodwill account so that amount

is to be written back against the new partners’ capital accounts.

iv. Taneika and Tiana are to share profits in the same ratio as before and Tamoy is to have the same share of profits as Tiana.

v. Tina is to take her car at its book value of $3 900 in part payment and the balance of all

she is owed by the firm in cash, except $20 000 which she is willing to leave as a loan account.

vi. The partners in the new firm are to start on an equal footing so far as capital and current accounts are concerned. Tamoy is to contribute cash to bring her capital and current accounts to the same amount as the original partner from the old firm who has the lower investment in the business.

The original partner in the old firm who has the higher investment will draw out cash so that her capital and current account balances equal those of her new partners.

Required:

Prepare the following accounts for the partnership:

a. Revaluation Account

b. Goodwill Account

c. Capital Account

d. Current Account

e. Retirement Account

f. Bank Account

 

Transcribed Image Text:

Non- Current Asset 2$ Premises 90 000 Plant 37 000 Vehicles 15 000 Fixtures 2 000 Total Non Current Assets 144 000 Current Assets Inventory 62 379 Receivables 34 980 Cash 760 Total Current Assets 98 119 Less: Current liabilities Payables 19 036 Bank overdraft 4 200 Total Current Liabilities (23 236) Net Current Assets 74 883 218 883 Less: Non-current Liabilities (28 000) 190 883 Loan – Tina Сapital Taneika 85 000 Tiana 65 000 Tina 35 000 185 000 Current Account Taneika 3 714 Tiana (2 509) Tina 4 678 5 883 190 883 Non- Current Asset 2$ Premises 90 000 Plant 37 000 Vehicles 15 000 Fixtures 2 000 Total Non Current Assets 144 000 Current Assets Inventory 62 379 Receivables 34 980 Cash 760 Total Current Assets 98 119 Less: Current liabilities Payables 19 036 Bank overdraft 4 200 Total Current Liabilities (23 236) Net Current Assets 74 883 218 883 Less: Non-current Liabilities (28 000) 190 883 Loan – Tina Сapital Taneika 85 000 Tiana 65 000 Tina 35 000 185 000 Current Account Taneika 3 714 Tiana (2 509) Tina 4 678 5 883 190 883

Answer rating: 100% (QA)

a Revaluation Account Revaluation Account Particulars Amount Particulars Amount To Plant 2000 By Pre... View the full answer