Bonnie and Clyde have been in partnership for several years sharing profits equally.

The partnership accounting year-end is 31 December. On 20 February 2009, they have decided to dissolve the partnership. After preparing the profit and loss account for the period 1 January 2009 to 20 February 2009, the balance sheet as at the latter date is as follows:

One of the motor vehicles was taken over by Clyde at an agreed valuation of $10,000.
The remainder of the vehicles were sold for $15,500. The stock realised $6,500 and $17,800 was received from trade debtors. A refund of the full amount of prepaid expenses was also received. Trade creditors were paid $20,900 in full settlement. The bank loan was fully repaid, including an interest penalty for early settlement of $250.
Accrued expenses were also fully paid off. Expenses for dissolving the partnership amounted to $1,500. The partnership also sold its business name and a list of its customers to a competitor for $3,000.
Required 1 Prepare the partnership's realisation account.
2 Prepare the partnership’s bank account.
3 Prepare the partners’ capital accounts.

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$ $ Motor vehicles Less Provision for depreciation Stock 45,000 12,200 32,800 5,700 Trade debtors 21,800 Less Provision for doubtful debts 1,100 20,700 Prepaid expenses 290 26,690 Less Liabilities Trade creditors 25,490 Bank overdraft Bank loan 5,000 9,000 Accrued expenses 3,000 42,490 17,000 Capital - Bonnie 9,000 - Clyde 5,000 14,000 Current account - Bonnie 5,000 - Clyde (on debit) (2,000) 3,000 17,000