Simba and Nala were in partnership trading as Hakuna Matata, sharing profits and losses in the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Simba and Nala were in partnership trading as Hakuna Matata, sharing profits and losses in the ratio of 3:2. The draft statement of financial position at 30 September 20x4 was as follows: HAKUNA MATATA (DRAFT) STATEMENT OF FINANCIAL POSITION AT 30 SÉPTEMBER 20X4 ASSETS Non-current assets Land Equipment Motor vehicle 316,000 160,000 36,000 120,000 83,000 28.000 Current assets Inventory Accounts receivable Cash TOTAL ASSETS 45,600 9,400 399.000 Equity and Liabilities Equity: Capital accounts: Simba 364,080 156,040 Nala 208,040 Current liabilities Account payable 34,920 399,000 The draft statement of financial position at 30 September 20x4 has been prepared based on a profit for the year of N$200,000, determined before considering the following adjustments: 1. Depreciation is to be provided on the equipment the vehicle at 20% per year on the reducing balance method. 2. The net realizable value of the inventory on hand is estimated at N$35,000. 3. The cash flow expected from the accounts receivable at 30 September 20x4 is N$43,320. On 1 October 20x4 Pumbaa and Timon were admitted to the Hakuna Matata partnership. The following terms and conditions relating to the admission were agreed upon: 1. Statement of financial position values after taking the above adjustments into account should be used. 2. Simba would take over the only motor vehicle for his personal use at its recoverable amount of N$90,000. 3. Puumba was to bring into the partnership his motor vehicle valued at N$80,000, as well as N$10,000 cash for a quarter share of the business. 4. Timon was to bring into the partnership a cash contribution to capital of N$45,000, for a one- eighth share of the business. 5. Simba and Nala were to give up the profit share allocated to the new partners according to their existing profit-sharing ratio. 3 YOU ARE REQUIRED TO: 1. Calculate the new profit sharing ratio of the four partners after the admission of Pumbaa and Timon. (4 marks) 2. Prepare the capital account of the partnership (in columnar form), taking all the above information into account. (21 marks) Simba and Nala were in partnership trading as Hakuna Matata, sharing profits and losses in the ratio of 3:2. The draft statement of financial position at 30 September 20x4 was as follows: HAKUNA MATATA (DRAFT) STATEMENT OF FINANCIAL POSITION AT 30 SÉPTEMBER 20X4 ASSETS Non-current assets Land Equipment Motor vehicle 316,000 160,000 36,000 120,000 83,000 28.000 Current assets Inventory Accounts receivable Cash TOTAL ASSETS 45,600 9,400 399.000 Equity and Liabilities Equity: Capital accounts: Simba 364,080 156,040 Nala 208,040 Current liabilities Account payable 34,920 399,000 The draft statement of financial position at 30 September 20x4 has been prepared based on a profit for the year of N$200,000, determined before considering the following adjustments: 1. Depreciation is to be provided on the equipment the vehicle at 20% per year on the reducing balance method. 2. The net realizable value of the inventory on hand is estimated at N$35,000. 3. The cash flow expected from the accounts receivable at 30 September 20x4 is N$43,320. On 1 October 20x4 Pumbaa and Timon were admitted to the Hakuna Matata partnership. The following terms and conditions relating to the admission were agreed upon: 1. Statement of financial position values after taking the above adjustments into account should be used. 2. Simba would take over the only motor vehicle for his personal use at its recoverable amount of N$90,000. 3. Puumba was to bring into the partnership his motor vehicle valued at N$80,000, as well as N$10,000 cash for a quarter share of the business. 4. Timon was to bring into the partnership a cash contribution to capital of N$45,000, for a one- eighth share of the business. 5. Simba and Nala were to give up the profit share allocated to the new partners according to their existing profit-sharing ratio. 3 YOU ARE REQUIRED TO: 1. Calculate the new profit sharing ratio of the four partners after the admission of Pumbaa and Timon. (4 marks) 2. Prepare the capital account of the partnership (in columnar form), taking all the above information into account. (21 marks)
Expert Answer:
Answer rating: 100% (QA)
1st Part Calculation of new partner sharing ratio among Simba nala Pumba and Timon Old Ration betwee... View the full answer
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
Students also viewed these accounting questions
-
The draft statement of financial position at 30 June 2021 for Red Ltd contained the following assets and liabilities: 2021 2020 $ $ Assets Cash 1,000 7,500 Accounts receivable 84,000 76,800 Allowance...
-
The comparative consolidated statement of financial position at December 31, Year 2, and the consolidated income statement for Year 2, of Parent Ltd. and its 70%-owned subsidiary are shown below....
-
The comparative consolidated statement of financial position at December 31, Year 2, and the consolidated income statement for Year 2, of Parent Ltd. and its 7Q%.owned subsidiary are shown below....
-
Sarah is confused about the difference between the perimeter and the area of a polygon. Explain the two concepts and the distinction between them.
-
The concepts of materiality and cost-effectiveness can limit the amount of detailed information included in the financial statements. Explain how an accountant might use each to exclude an item from...
-
A solution of NaOH in water is prepared by diluting a concentrated solution in an agitated, jacketed, vessel. The strength of the concentrated solution is 50 per cent w/w and 2500 kg of 5 per cent...
-
In a randomly selected sample of women ages 20 34, the mean total cholesterol level is 179 milligrams per deciliter with a standard deviation of 38.9 milligrams per deciliter. Assume the total...
-
The inventory of Wei Company on December 31, 2014, consists of the following items. aPart No. 21 is obsolete and has a realizable value of $0.20 each as scrap. Instructions (a) Determine the...
-
Evaluate the role of process intensification (PI) in enhancing the efficiency and sustainability of chemical manufacturing processes, considering the integration of intensified unit operations, such...
-
Davis has the following obligations at December 31, 2025: Note payable due in monthly installments of $50,000, plus interest, through November 30, 2026 Note payable due in monthly installments of...
-
1. Consider the following array definition int values [5]=(4,7,6,8,2) What does each of the following statements display? cout < < values [4] < < endl cout < < (values [2] + values[3]) < < endl; cout...
-
Amy Jones was physically and mentally abused by her husband, Mark, for the last 10 years of their marriage. Amy routinely ended up in the hospital as a result of Marks terrible beatings. One evening...
-
Jodie Matthews is the lead prosecutor on a murder trial that is currently in the process of jury selection. Juror #2, Lane Smith, claims that he was a college roommate of the defense attorney. Juror...
-
James Garfalo was arrested for selling 10 grams of cocaine to an undercover police officer. At his jury trial in the state trial court, James was convicted and sentenced to two years in prison. James...
-
Assume the maximum pressure ratio. Determine the efficiency and work ratio of the cycle in P17.1. \([0.75,0\). P17.1. A gas turbine engine operates between minimum temperature \(T_{1}\) and maximum...
-
On 1 December 20x0, the board of Progressive Corporation approved a share option plan for selected employees. Up to 5,000,000 ordinary shares could be issued under this option plan. The terms of the...
-
Bonita sold land she purchased three months earlier for use inher business. Her cost and adjusted basis in the land prior to thesale was $70,000. She also incurred $10,000nin expenses related tothe 2...
-
Prove that the mean heat capacities C P H and C P S are inherently positive, whether T > T 0 or T < T 0 . Explain why they are well defined for T = T 0 .
-
Metal Caissons Limited (MCL) was incorporated on December 15, Year 8, to build metal caissons, which are large containers used for transporting military equipment. John Ladd (president) and Paul...
-
Why does adding the parent's share of the increase in retained earnings of the subsidiary and the parent's retained earnings under the cost method result in consolidated retained earnings? Assume...
-
Explain how the matching principle is applied when amortizing the acquisi tion differential.
-
What does the Richter scale measure?
-
Where do earthquakes occur?
-
Why do earthquakes produce seismic waves?
Study smarter with the SolutionInn App