Croissant, Muffin and Crme Danish are in partnership and share profits in the ratio 3:2:1. On 30

Croissant, Muffin and Crème Danish are in partnership and share profits in the ratio 3:2:1. On 30 April 2020 Croissant decides to withdraw from the partnership. At this stage the balance sheet of the partnership is as follows:

For the purpose of Croissant’s withdrawal, the following was decided:
1. Land and buildings are worth N$78 000.this valuation is only for the purpose of Croissant’s withdrawal from the partnership.

2. Goodwill is valued at N$96 000 for the purpose of Croissant’s withdrawal from the partnership but it must be retained at N$ 6 000 in the books of the new partnership.

3. The general reserve must be retained in the books.

4. The new profit-sharing ratio between Muffin and Crème Danish will be 4:1

5. Croissant will, as a repayment of his loan account, take equipment with a caring amount of N$ 8 000 as well as a cash amount of N$ 40 000. The remaining balance will be taken over by Muffin and Crème Danish in their personal capacities and will be paid according to the new profit-sharing ratio.

YOU ARE REQUIRED TO:
Prepare the capital accounts of the partners in column format and balance the accounts properly.

Transcribed Image Text:

CROISSANT, MUFFIN AND CRÈME DANISH Statement of Financial position as at 30 April 2020 ASSETS NON-CURRENT ASSETS: N$ Land and buildings Equipment Goodwill 42 000 12 000 6 000 CURRENT ASSETS 158 000 TOTAL ASSETS 216 000 EQUITY: CAPITAL AND RESERVES Capital: Croissant Muffin Crème Danish 100 000 40 000 60 000 General Reserves TOTAL EQUITY 18 000 216 000 CROISSANT, MUFFIN AND CRÈME DANISH Statement of Financial position as at 30 April 2020 ASSETS NON-CURRENT ASSETS: N$ Land and buildings Equipment Goodwill 42 000 12 000 6 000 CURRENT ASSETS 158 000 TOTAL ASSETS 216 000 EQUITY: CAPITAL AND RESERVES Capital: Croissant Muffin Crème Danish 100 000 40 000 60 000 General Reserves TOTAL EQUITY 18 000 216 000

Answer rating: 100% (QA)

Crame Darish Particaless Creme Geissant I Mufin 100 000 40... View the full answer