help with question 2. Full answers Financial accounting 1a.

Question 2 (29 marks) Abdullah and Bheki commenced trading as partners sharing profits and losses in the ratio of 3:2. On 30 June 2018 their abridged statement of financial position was a follows: ASSETS Property Machinery Inventory Accounts receivable Bank EQUITY & LIABILITIES NSNS 40 000 Capital: Abdullah 50 000 20 000 : Bheki 30 000 24 000 General reserves 22 000 18 000 Accounts payable 12.000 12 000 114 000 114 000 On 1 July 2018, it was agreed to admit Zanele into the partnership. He was expected to bring in cash of N$ 20 000, plus an additional amount for goodwill. 1. The partners decided to value goodwill at N$ 24 000, but that goodwill was not to be shown as an asset in the statement of financial position and that no account for goodwill will be open in the ledger. Any adjustment for goodwill therefore had to be made directly on capital accounts. 2. Property was revalued at N$ 50 000 and inventory at N$ 22 000. 3. The three partners in the new partnership are to share profits and losses in the ratio: Abdullah 5 Zanele = 2 and Bheki = 1, respectively. 4. Abdullah and Bheki were to change their capital balances to be proportionate to that of Zanele in profit-sharing ratio. For this purpose separate loan accounts for Abdullah and Bheki would be created. You are required to: 1. Prepare the entries in the general journal to record the happenings described for the admission of Zanele. (13 marks) 2. Prepare the statement of financial position of the new partnership. (13 marks) 3. Discuss the circumstances under which it will be equitable to introduce interest on capital in partnership agreement. (3 marks) Page 11 of 19