Following were the terms agreed by partners upon dissolution i Dissolution cost was incurred and paid Details of the dissolution cost are legal fees $900, Valuer fees $1,100 and other miscellaneous cost $300 ii Partner PER decided to take over the vehicle at a loss of $3,000 and partner FECT decided to take over office equipment at a loss of $1,000 However, premises were sold to local government for $85,000 iii Due to immediate dissolution, business was only able to recover 50 of the outstanding with remaining 50 will be written off Inventory was sold for at net realizable value 75 of cost All accounts payable was fully settled with 10 discount All other liabilities were fully settled All payment and receipts were made through bank account All cash in hand were transferred to bank account at the beginning of dissolution process Required Prepare a realization account Prepare capital account of partners Prepare bank account Due to COVID 19 pandemic, most partnership businesses are struggling to survive This has led to dissolution of the business One of the causes for dissolution is a partner has been declared bankrupt Briefly explain how this partners capital deficiency will be recovered Revision Question 2 PERFECTION PARTNERS have an agreement that its partners will share profit or losses in according to capital balance as at 31 March 2021 (prior to dissolution) It was also agreed that in the event there is any partner who is unable to meet capital deficiency, it will be shared by the remaining partners equally Prior to dissolution, PERFECTION PARTNERS provided following statement of financial position PERFECTION PARTNERS Statement of financial position as at 31 March 2021 Non current assets Vehicle 50,000 Less Accumulated depreciation (12,000) Office Equipment 18,000 Less Accumulated depreciation (7,800) Premises 85,000 Less Accumulated depreciation (15,000) 38,000 10,200 70,000 118,200 690 Current Assets Cash in hand Cash at bank Accounts receivable Ending inventory 7,200 3,550 20,500 31,940 Current Liabilities Accounts payable Accrued Utilities 12,500 330 (12,830) Non current liabilities Loan PER Net Assets (10,000) 127,310 Equity Capital Account PER Capital Account FECT Capital Account TION Current Account PER Current Account FECT Current Account TION 100,000 40,000 40,000 20,000 20 280 12,530 (5 500) 27,310 127,310

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Following were the terms agreed by partners upon dissolution: i. Dissolution cost was incurred and paid. Details of the dissolution cost are legal fees $900,

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Following were the terms agreed by partners upon dissolution:

i. Dissolution cost was incurred and paid. Details of the dissolution cost are legal fees $900, Valuer fees $1,100 and other miscellaneous cost $300.

ii. Partner PER decided to take over the vehicle at a loss of $3,000 and partner FECT decided to take over office equipment at a loss of $1,000. However, premises were sold to local government for $85,000.

iii. Due to immediate dissolution, business was only able to recover 50% of the outstanding with remaining 50% will be written off.

Inventory was sold for at net realizable value 75% of cost.
All accounts payable was fully settled with 10% discount. All other liabilities were fully settled.
All payment and receipts were made through bank account. All cash in hand were transferred to bank account at the beginning of dissolution process.

Required:

Prepare a realization account.

Prepare capital account of partners.

Prepare bank account.

Due to COVID-19 pandemic, most partnership businesses are struggling to survive. This has led to dissolution of the business. One of the causes for dissolution is a partner has been declared bankrupt. Briefly explain how this partners capital deficiency will be recovered.

Revision Question 2 PERFECTION PARTNERS have an agreement that its partners will share profit or losses in according to capital balance as at 31 March 2021 (prior to dissolution). It was also agreed that in the event there is any partner who is unable to meet capital deficiency, it will be shared by the remaining partners equally. Prior to dissolution, PERFECTION PARTNERS provided following statement of financial position: PERFECTION PARTNERS Statement of financial position as at 31 March 2021 Non-current assets Vehicle 50,000 Less: Accumulated depreciation (12,000) Office Equipment 18,000 Less: Accumulated depreciation (7,800) Premises 85,000 Less: Accumulated depreciation (15,000) 38,000 10,200 70,000 118,200 690 Current Assets Cash in hand Cash at bank Accounts receivable Ending inventory 7,200 3,550 20,500 31,940 Current Liabilities Accounts payable Accrued Utilities 12,500 330 (12,830) Non-current liabilities Loan - PER Net Assets (10,000) 127,310 Equity Capital Account - PER Capital Account -FECT Capital Account - TION Current Account - PER Current Account -FECT Current Account - TION 100,000 40,000 40,000 20,000 20.280 12,530 (5.500) 27,310 127,310