The statement of financial position of CHJ Ltd on 30th Sept.20X disclosed the following. COST DEPR...

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The statement of financial position of CHJ Ltd on 30th Sept.20X disclosed the following. COST DEPR NET $ $ IS Non current asset vehicles Equipment current assets Stocks Debtors Bank Equity and Liability Liability Creditors share capital ordinary shares reserve profit and loss 100,000 10,000 90,000 70,000 30,000| 40,000 20,000 12,000 8,000 190,000 52,000 138,000 181,000 86,000 22,000 289,000 427,000 65,000 300,000 62,000 427,000 At that date, the company was converted into a partnership, taking all company's assets excluding cash into a new firm in the following terms. 1. Revaluation to take place: All assets and liabilities were revaluated as follows; Freehold premises at $120,000; Vehicles at $30,000; Equipment at $8,000; Stocks at $155,000; Debtors at $82,000; and Creditors at $65,000. 2. The total value of the business was agreed to be at $355,000 to be distributed from ordinary shares in the following arrangement; C by $150,000, H by $ 100,000, J by 55,000 and as a loan by C for $50,000. J paid a further $30,000 into a partnership bank account as additional capital. Required; Prepare entries for formation of a partnership and its immediate statement of financial position. The statement of financial position of CHJ Ltd on 30th Sept.20X disclosed the following. COST DEPR NET $ $ IS Non current asset vehicles Equipment current assets Stocks Debtors Bank Equity and Liability Liability Creditors share capital ordinary shares reserve profit and loss 100,000 10,000 90,000 70,000 30,000| 40,000 20,000 12,000 8,000 190,000 52,000 138,000 181,000 86,000 22,000 289,000 427,000 65,000 300,000 62,000 427,000 At that date, the company was converted into a partnership, taking all company's assets excluding cash into a new firm in the following terms. 1. Revaluation to take place: All assets and liabilities were revaluated as follows; Freehold premises at $120,000; Vehicles at $30,000; Equipment at $8,000; Stocks at $155,000; Debtors at $82,000; and Creditors at $65,000. 2. The total value of the business was agreed to be at $355,000 to be distributed from ordinary shares in the following arrangement; C by $150,000, H by $ 100,000, J by 55,000 and as a loan by C for $50,000. J paid a further $30,000 into a partnership bank account as additional capital. Required; Prepare entries for formation of a partnership and its immediate statement of financial position.

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Journal Entries for Formation of Partnership Revaluation of assets and liabilities Account Type Amou... View the full answer