Alan, Bob and Charles are in partnership sharing profit and losses in the ratio 3:2:1 respectively....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Alan, Bob and Charles are in partnership sharing profit and losses in the ratio 3:2:1 respectively. The Balance Sheet for the partnership as of 30 June 2006 shown. Charles decides to retire from the business on 30 June 2006 and Don is admitted as a partner on the same date. The following matters are agreed: a) Certain assets were revalued. Premises $ 120,000, Plant $ 35,000 & Stock $ 54,179. b) Provision is to be made for doubtful debts in the sum of $ 3,000. c) Goodwill is to be recorded on the books on the day Charles retires in the sum of $ 42,000. The partners to 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. d) Alan and Bob are to share profits in the same ratio as before and Don is to have the same share of profits as Bob. e) Charles is to take his car at its book value of $ 3,900 in part payment and the balance of all he is owed by the firm in cash except $ 20,000 which he is willingly to leave as a loan account f) The partners in the new firm are to start on an equal footing so far as capital and current accounts are concerned. Don is to contribute cash to bring his 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 his capital and current account balances equal those of his new partner. Required: 1. Account for the above transactions including goodwill and retiring partners' accounts 2. Draft a balance sheet for the partnership of Alan, Bob and Don as of 30 June 2006. Alan, Bob and Charles are in partnership sharing profit and losses in the ratio 3:2:1 respectively. The Balance Sheet for the partnership as of 30 June 2006 shown. Charles decides to retire from the business on 30 June 2006 and Don is admitted as a partner on the same date. The following matters are agreed: a) Certain assets were revalued. Premises $ 120,000, Plant $ 35,000 & Stock $ 54,179. b) Provision is to be made for doubtful debts in the sum of $ 3,000. c) Goodwill is to be recorded on the books on the day Charles retires in the sum of $ 42,000. The partners to 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. d) Alan and Bob are to share profits in the same ratio as before and Don is to have the same share of profits as Bob. e) Charles is to take his car at its book value of $ 3,900 in part payment and the balance of all he is owed by the firm in cash except $ 20,000 which he is willingly to leave as a loan account f) The partners in the new firm are to start on an equal footing so far as capital and current accounts are concerned. Don is to contribute cash to bring his 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 his capital and current account balances equal those of his new partner. Required: 1. Account for the above transactions including goodwill and retiring partners' accounts 2. Draft a balance sheet for the partnership of Alan, Bob and Don as of 30 June 2006.
Expert Answer:
Answer rating: 100% (QA)
a Revaluation reserve Ac 9000000 Premises 3700000 Plant 6237900 Stock 300000 Premis... View the full answer
Related Book For
Financial Accounting
ISBN: 978-0132889711
1st Canadian Edition
Authors: Jeffrey Waybright, Liang Hsuan Chen, Rhonda Pyper
Posted Date:
Students also viewed these accounting questions
-
The classified balance sheet for Tipke, Inc. as of December 31, 2014, is presented next. Requirements 1. Calculate Tipkes debt ratio as of December 31, 2014. 2. What percentage of Tipkes assets...
-
The classified balance sheet for Thorn, Inc. as of December 31,2014, is presented next. Requirements 1. Calculate Thorns debt ratio as of December 31, 2014. 2. What percentage of Thorns assets belong...
-
The comparative balance sheet for Short Company as of December 31, 2016 and 2015, is shown below, followed by the condensed income statement. INSTRUCTIONS Prepare a statement of cash flows for 2016....
-
In 2010 Casey made a taxable gift of $7.3 million to both Stephanie and Linda (a total of $14.6 million in taxable gifts). Required: Calculate the amount of gift tax due this year and Caseys unused...
-
Nespresso, a division of Nestles SA, pioneered the development of the single serving coffee ma chine in 1986. By 2009, Nespresso had achieved sales of over $2.6 billion with double-digit growth...
-
Produce a wait-for-graph for the following transaction scenario and determine whether deadlock exists. Data items locked by transaction Data items transaction is waiting for Iransaction X1, X X7, X...
-
Table B.23 contains player efficiency ratings (PER) from the 2016-17 and 2017-18 NBA combine that evaluates 60 rookies hoping to be drafted by NBA teams. PER is a measure of a player's per-minute...
-
The Heese Restaurant Group supplies its franchise restaurants with many pre- manufactured ingredients (such as bags of frozen French fries), while other ingredients (such as lettuce and tomatoes) are...
-
Please complete a swot analysis on taking classes completely online. From your point of view ,what are the strengths, weakness, opportunity and threats? Think from the standpoint of you as the...
-
People in a city are asked if they support a new recycling law. (a) What are the cases? (b) What is the variable and is it quantitative or categorical?
-
Answer the following questions as you watch the video Biography of Hokusai (BBC Documentary) (44 minutes)= 1) What do you know about the artist Katsushika Hokusai? (Some important information is also...
-
You have $ 1 0 0 , 0 0 0 to invest in either Stock D , Stock F , or a risk - free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 1 1 . 8...
-
Please fill out the excel sheet below completely: Cakes Sold per day Average Retail per Cake Cakes Sold per year Gross Sales (year) Rent Utilities Labor COGS (50% of Gross Sales) Total Cost Net...
-
Assume that you are a portfolio manager, currently evaluating two possible investment. You have gathered following information: Assume that an analysist at a major brokerage firm have been following...
-
Janie graduates from high school in 2023 and enrolls in college in the fall. Her parents (who file a joint return) pay $10,975 for her tuition and fees. If required, round your computations to the...
-
Cornell Company sold some inventory to Germany, Inc., as shown below. Germany has 90 days to pay for the transaction, which was denominated in Euros. Cornell Company hedged the transaction by buying...
-
When performing a leak down test and you can hear a hissing noise coming from the valve cover What do you conclude?
-
The water in tank A is at 270 F with quality of 10% and mass 1 lbm. It is connected to a piston/cylinder holding constant pressure of 40 psia initially with 1 lbm water at 700 F. The valve is opened,...
-
MiThais new accounting clerk could not get the bank reconciliation balanced. She needs your help and has provided you with her bank reconciliation and all the information she used to prepare the bank...
-
Inland Equipment, Inc. assembled the following data related to its cash transactions for the year ended June 30, 2014: Payment of dividends ............ $ 6,000 Proceeds from issuance of shares ........
-
The introduction to this chapter suggests that the chapter will explore the answers to some questions about inventory. Did you get the answers to those questions? Specifically, a. Why does inventory...
-
Consider a Poisson regression. Let \(e_{i}=y_{i}-\widehat{\mu}_{i}\) denote the \(i\) th ordinary residual. Assume that an intercept is used in the model so that one of the explanatory variables...
-
a. Assume that \(y_{1}, \ldots, y_{n}\) are i.i.d. with a negative binomial distribution with parameters \(r\) and \(p\). Determine the maximum likelihood estimators. b. Use the sampling mechanism in...
-
For the data in Table 12.1, confirm that the Pearson statistic in equation (12.3) is 41.98 . Table 12.1 (12.3) Count Observed (j) (nj) Fitted Counts Using the Poisson Distribution (np;) 01234 6,996...
Study smarter with the SolutionInn App