Shah, Eadli and Amer have been in partnership, sharing profits and losses at a ratio of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Shah, Eadli and Amer have been in partnership, sharing profits and losses at a ratio of 3:4:3 respectively. The following are the balances in the book of partnership as at 30 June 2019: RM Building (at cost) 40,000 Motor vehicles 54,000 Machinery 14,000 Inventories 15,000 Accounts Receivable 13,000 Bank 13,000 Capital account: Shah 32,000 Eadli 48,000 Amer 30,000 Current account: Shah 16,000 Eadli 10,000 Amer (4,000) Accounts Payable 17,000 Fadli decided to retire from the business on 1 July 2019 and Ariana is admitted as a partner on that date. The partners have agreed on the following matters. 1. The value of building was increased to RM70,000 determine by professional valuer who will be paid RM15,000 for his professional charges. 2. Motor vehicles were to be revalued at RM40,000. 3. Machinery value was to be revalued at RM8,000. 4. The inventories were to be revalued at RM13,000. Revaluation expenses amounting to RM3,000 were paid by cheque. 5. 6. The balance in Fadli's, capital account will remain as a loan to the partnership at an interest rate of 10% per annum. 7. Shah, Amer and Ariana are to share profits and losses in the ratio 2:2:1 respectively. 8. Ariana will bring in RM50,000 cash into the partnership as her capital. 9. The value of goodwill was agreed to be RM22,000. The goodwill is not to be maintained in the books. Required: a. Prepare the following accounts: i. Goodwill account. (Show the computation of goodwill) (3 marks) ii. Revaluation account. (4 marks) ii. Partners' Capital account. (7 marks) iv. Statement of Financial Position of the partnership as at 1 July 2019. (9 marks) Shah, Eadli and Amer have been in partnership, sharing profits and losses at a ratio of 3:4:3 respectively. The following are the balances in the book of partnership as at 30 June 2019: RM Building (at cost) 40,000 Motor vehicles 54,000 Machinery 14,000 Inventories 15,000 Accounts Receivable 13,000 Bank 13,000 Capital account: Shah 32,000 Eadli 48,000 Amer 30,000 Current account: Shah 16,000 Eadli 10,000 Amer (4,000) Accounts Payable 17,000 Fadli decided to retire from the business on 1 July 2019 and Ariana is admitted as a partner on that date. The partners have agreed on the following matters. 1. The value of building was increased to RM70,000 determine by professional valuer who will be paid RM15,000 for his professional charges. 2. Motor vehicles were to be revalued at RM40,000. 3. Machinery value was to be revalued at RM8,000. 4. The inventories were to be revalued at RM13,000. Revaluation expenses amounting to RM3,000 were paid by cheque. 5. 6. The balance in Fadli's, capital account will remain as a loan to the partnership at an interest rate of 10% per annum. 7. Shah, Amer and Ariana are to share profits and losses in the ratio 2:2:1 respectively. 8. Ariana will bring in RM50,000 cash into the partnership as her capital. 9. The value of goodwill was agreed to be RM22,000. The goodwill is not to be maintained in the books. Required: a. Prepare the following accounts: i. Goodwill account. (Show the computation of goodwill) (3 marks) ii. Revaluation account. (4 marks) ii. Partners' Capital account. (7 marks) iv. Statement of Financial Position of the partnership as at 1 July 2019. (9 marks)
Expert Answer:
Answer rating: 100% (QA)
The partners agreed that goodwill is RM 22000 Therefore this good will is debited into the goodwill account and credited into the old partners capital account using the old profit and loss sharing rat... View the full answer
Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134453736
8th Canadian Edition
Authors: Srikant M. Datar, Madhav V. Rajan, Louis Beaubien
Posted Date:
Students also viewed these accounting questions
-
On September 15, Jackie Landall decided to retire from the partnership of Kitchener, Landall, and Page. The partnership decided to buy her out. After the assets of the partnership had been adjusted...
-
The following are account balances relating to 2019 (in thousands}: Property tax on plant building $ 3,800 Marketing, distribution, and customer-service costs 44,400 Finished goods inventory, January...
-
The following are account balances relating to 2019 (in thousands}: Property tax on plant building $ 4,200 Marketing, distribution, and customer-service costs 44,400 Finished goods inventory, January...
-
You have extracted a trial balance and drawn up accounts for the year ended 31 December 20X7. There was a shortage of 78 on the credit side of the trial balance, a suspense account being opened for...
-
Assume you are working for a medium-sized company that sells products on its Web site and that the company keeps the computers that run its Web server, database server, and transaction processing...
-
The S&OP team at Kansas Furniture, has received the following estimates of demand requirements: a) Assuming one-time stockout costs for lost sales of $100 per unit, inventory carrying costs of $25...
-
If all of the particles shown in Figure Q24.33 are electrons, what is the direction of the magnetic field that produced the indicated deflection? A. Up. B. Down. C. Out of the plane of the paper. D....
-
Spitzer Specialty Furniture manufactures furniture for specialty shops throughout the Southwest. With annual sales of $12 million, the company has four major product lines-bookcases, magazine racks,...
-
a short essay developing your thoughts on the following subjects. Illustrate with examples 1. Discuss the relationship between the host and the guest 2. The negative effects of travel bans and the...
-
Calculate Gillian Pool and Spa Supplies average annual compound growth rate of sales and analyze its earnings performance for the past 5 years.
-
A shallow foundation measuring 1 m 2 m in plan is to be constructed over a normally consolidated sand layer. Given: Df = 1 m, N60 increases with depth, N60, average (in the depth of stress...
-
Adacan Industries located in Saskatchewan has a workers' compensation premium rate of $1.76 per $100.00 of assessable payroll. The actual assessable payroll for the previous year consisted of:...
-
A random variable x has the probability density = {Ae-xx 0 p(x) = (0 x 00) (x < 0). a. Determine the normalization constant A in terms of . b. Determine the mean value of x and its most probable...
-
What is the most important factor that determines how much of a product individuals will buy or sell in the marketplace?
-
Need help with these google slides - https://docs.google.com/presentation/d/1kgLS1qBc0V886zSxeitWT_4EiP1V8NiGELsnC1ZQtao/edit#slide=id.ge4615323c0_0_58
-
1. The federal income tax on individuals can be described as what type of tax structure? 2. Bonus depreciation is an example of how the government uses tax law to encourage which type of...
-
If a firm's capital structure (the firm's mix of debt and equity) changes, the firm's weighted average cost of capital (WACC) will not change. This means that cash flows from year 1 through year...
-
Tell whether the angles or sides are corresponding angles, corresponding sides, or neither. AC and JK
-
Keating & Partners is a law firm specializing in labour relations and employee-related work. It employs 25 professionals (5 partners and 20 managers) who work directly with its clients. The average...
-
An auditor for Canada Revenue Agency is trying to reconstruct some partially destroyed records of two taxpayers. For each case in the accompanying list, find the unknowns designated by capital...
-
Are for-profit businesses the only users of revenue allocation? Explain.
-
What percentage of women have red blood cell counts in the normal range from 4.2 to 5.4? Assume that red blood cell counts of women are normally distributed with a mean of 4.577 and a standard...
-
Find P 80 , the 80th percentile for the red blood cell counts of women.
-
If 25 women are randomly selected, find the probability that the mean of their red blood cell counts is less than 4.444. Assume that red blood cell counts of women are normally distributed with a...
Study smarter with the SolutionInn App