Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gina and Linda are in a partnership, buying and sell antiques. They are trading as Nanda Antiques, and share equally in the profits or losses

image text in transcribed
image text in transcribed
Gina and Linda are in a partnership, buying and sell antiques. They are trading as Nanda Antiques, and share equally in the profits or losses of the partnership. Due to the economic downfall and the steady decline in customers, they decided to liquidate the partnership simultaneously as from 1 April 2020. On 31 March 2020 the following list of balances was obtained from the accounting records of Nanda Antiques: NS 55 600 46 200 27 800 18 480 4 000 3 000 Furniture and equipment at cost Motor vehicle at cost Accumulated depreciation: Furniture and equipment Accumulated depreciation: Motor vehicle Asset replacement reserve Goodwill Creditors control Inventory Debtors control Capital: Gina Capital: Linda Current account: Gina (Cr) Current account: Linda (Cr) Bank (Dr) 3 600 22 000 24 900 50 000 50 000 1 010 3010 6 200 Additional information: During April 2010 the following transactions took place: The furniture and equipment were sold for NS42 000, cash. 2. The motor vehicle was taken over by Linda at an agreed value of NS 41 000. All the creditors were paid and a settlement discount of N$360 was received The inventory was sold for cash NS 19 000. A debtor with an outstanding balance of NS 4 200 was declared insolvent. His account must be written off. A 10% settlement discount was offered to all the other debtors if they paid their accounts before 24 April 2020. All of them settled their accounts accordingly. Liquidation costs, amounting to NS 6 500, were paid. 6. MARKS REQUIRED a) Explain the 2 differences between simultaneous liquidation and piecemeal liquidation b) The liquidation/realization account c) The capital account of partners showing the final payment to close the books of the partnership. Prepare the capital account of Gina if, the partnership incurred a net loss of NS40 000 on Liquidation and Linda do not have sufficient personal funds to cover the final shortfall on her capital account

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions