Arya, Denis and Sofia decide to form a partnership called ADS Luxury to start a business...

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Arya, Denis and Sofia decide to form a partnership called "ADS Luxury" to start a business selling designer clothing and footwear. Upon discussion, all the partners agree to contribute cash of $25,000 each. In addition, Denis contributes designer clothing he bought five months prior for $38,500, with a current market value of $35,180; Sofia contributes new IT equipment worth $25,150 to help with online sales and Arya contributes a delivery car with a carrying value of $73,500 and fair value of $65,270. The partners decide to split the first $45,000 of the business's profits/losses equally amongst the partners, and any additional profits/losses in proportion to their initial capital contributions to the partnership. Arya, Denis and Sofia work together well and record a $115,000 profit in the first year of the business. However, in the second year, Denis decides to leave the partnership due to personal circumstances and withdraws $90,000 from the business on his departure. Despite the loss of Denis, the remaining partners, Arya and Sofia, are determined to make the business (ADS Luxury) grow and prosper into the future. Required: a) Journalise the distribution of the $115,000 profit in the first-year of the partnership (2 marks) b) Journalise the departure (withdrawal) of Denis from the partnership (3 marks) Note: No explanations are required. Please distinguish between your responses to part a) and b) Arya, Denis and Sofia decide to form a partnership called "ADS Luxury" to start a business selling designer clothing and footwear. Upon discussion, all the partners agree to contribute cash of $25,000 each. In addition, Denis contributes designer clothing he bought five months prior for $38,500, with a current market value of $35,180; Sofia contributes new IT equipment worth $25,150 to help with online sales and Arya contributes a delivery car with a carrying value of $73,500 and fair value of $65,270. The partners decide to split the first $45,000 of the business's profits/losses equally amongst the partners, and any additional profits/losses in proportion to their initial capital contributions to the partnership. Arya, Denis and Sofia work together well and record a $115,000 profit in the first year of the business. However, in the second year, Denis decides to leave the partnership due to personal circumstances and withdraws $90,000 from the business on his departure. Despite the loss of Denis, the remaining partners, Arya and Sofia, are determined to make the business (ADS Luxury) grow and prosper into the future. Required: a) Journalise the distribution of the $115,000 profit in the first-year of the partnership (2 marks) b) Journalise the departure (withdrawal) of Denis from the partnership (3 marks) Note: No explanations are required. Please distinguish between your responses to part a) and b)

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a Journalizing the distribution of the 115000 profit in the first year of the partnership Each partn... View the full answer