At 31 December 2017, the statement of financial position of A, B and C, who are equal partners, was as follows:

A retired at that date. In order to determine the amount due to him the following revaluations were made: Freehold premises £18,000; machinery and tools £16,000; investments £5,100.
The value of the goodwill was agreed at £8,000. It was arranged that A should take over the investments in part payment of the amount due to him, the balance to be settled in cash. B and C would increase their capitals by paying in £10,000 and £6,000 respectively. These changes were all carried out.

Required:

(a) Prepare the revaluation account, bank account and capital accounts,

(b) Prepare the opening statement of financial position of B and C.

Transcribed Image Text:

w Non-current assets Freehold premises 16,000 Machinery and tools 15,100 Investment, at cost 4,000 35,100 Current assets Inventory 16,000 Accounts receivable 12,800 Bank 12,100 40,900 Total assets Current liabilities Net assets Capital accounts A B C Total capital 76,000 Accounts payable (14,000) 62,000 20,000 17,000 25,000 62,000