Martin and Stephen share profits in the ratio 2 : 1. They decide to terminate their partnership on 31 December 20X9. Their statement of financial position is as follows:

The dissolution progressed as follows:
1. £350 of trade receivables could not be recovered.
2. Trade payables gave 10 per cent discount when settled.
3. Non-current assets realized £2,950.
4. Realization costs of £50 were paid.
5. Inventory realized 20 per cent more than anticipated.
6. Partners’ claims were met and the books closed.

Required
Prepare the ledger accounts showing the final distributions to be paid to each partner.

Transcribed Image Text:

Statement of financial position for Martin and Stephen as at 31 December 20X9 Dep'n NBV £ £ 2,400 3,600 ASSETS Non-current assets Current assets Inventory Trade receivables Cash Total assets EQUITY AND LIABILITIES Equity capital Capital Current Total equity Non-current liabilities Loan account: Martin Total non-current liabilities Current liabilities Trade payables Total current liabilities Total equity and liabilities Cost £ 6,000 Martin 5,000 150 5,150 Stephen 3,000 (100) 2,900 4,150 3,850 250 8,250 11,850 8,000 50 8,050 1,000 1,000 2,800 2,800 11,850