The Statement of financial position as at 31 March 2012, of Sarah and Terry, sharing profits equally, reported their position as. Current assets included £30,000 cash. Expenses of dissolution amounted to £4,000. Answer the questions below treating each as an independent scenario:

(a) On a piecemeal dissolution sale of the assets realised £240,000 and liabilities were discharged subject to 10% discount. Identify the gain or loss on dissolution of the partnership

(b) Sarah’s capital and current accounts totalled £140,000. She took over from the partnership a vehicle acquired for £30,000 and depreciated by £8,000, while the remaining assets were sold for £280,000 and liabilities discharged subject to 20% discount. How much will Sarah receive on closure of the partnership?

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Tangible non current assets £180,000 Current assets £120,000 Current liabilities £80,000