Question
Kamal, Teoh and Mohan are in a legal partnership. The following balances were extracted from the partnership books of account as at 31 March 2018.
Kamal, Teoh and Mohan are in a legal partnership. The following balances were extracted from the partnership books of account as at 31 March 2018.
|
| RM | RM |
| Capital account as at 1 April 2017: |
|
|
| Kamal |
| 72,000 |
| Teoh |
| 62,000 |
| Mohan |
| 52,000 |
| Current account as at 1 April 2017: |
|
|
| Kamal | 45,000 |
|
| Teoh | 44,000 |
|
| Mohan | 43,000 |
|
| Land and building | 102,000 |
|
| Accumulated depreciation |
| 66,000 |
| Fixtures and fittings | 52,000 |
|
| Accumulated depreciation |
| 46,000 |
| Inventories | 45,500 |
|
| Accounts receivable (net) | 67,000 |
|
| Bank | 83,500 |
|
| Accounts payable |
| 54,000 |
| Revaluation surplus |
| 63,500 |
| Net profit for the year |
| 66,500 |
|
| 482,000 | 482,000 |
Additional information:
-
- The partnership profit sharing ratio is 3:2:1.
- The partners will be entitled to 15 percent interest per annum on capital account balances.
- Kamal retired on 31 December 2017. Upon his retirement the assets are revalued resulting a revaluation surplus of RM63,500.
- Goodwill was valued at two years purchase of the average profit for the last three years. The profit for the last three years were:
|
| RM |
| 31 March 2017 | 90,000 |
| 31 March 2016 | 56,000 |
| 31 March 2015 | 52,000 |
- Due to his retirement, Kamals current account is to be transferred to his capital account. The partnership agreed to pay the amount due to Kamal, except for RM92,000 which remain as a loan to the partnership.
- Following Kamals decision to retire, Teoh and Mohan invited Salim to join the partnership on 1 January 2018. Salim agreed to pay RM57,000 into the new partnership as his capital contribution and RM49,000 for his share of goodwill. This entry has not been recorded in the books upon admission of Salim.
- The new partnership profit sharing ratio is 2:1:1.
- The net profit for the year is deemed to have been earned evenly throughout the year.
REQUIRED:
- Compute the goodwill for the partnership.
- Prepare the partnership appropriation account incorporating the pre and post period for the year ended 31 March 2018.
- Prepare the partners current account in a columnar form.
- Prepare the partners capital account in a columnar form.
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Foreign Corrupt Practices Act Compliance Guidebook Protecting Your Organization From Bribery And Corruption
Authors: Martin T. Biegelman, Daniel R. Biegelman
1st Edition
0470527935, 978-0470527931
