PART A

Andy, Betty and Charlie are in partnership, sharing profits or losses in the ratio of 3:2:1 respectively.The balances of their respective accounts as at 31 December 2018 were as follows:

CurrentCapital

Andy$15,000$20,000

Betty$5,500 $20,000

Charlie($30,500)$20,000

Only Andy was paid monthly salary of $1,500.During the year, Andy and Charlie took drawings of $4,000 and $13,000 respectively. No interest is chargeable on drawings and capital. There is a 3% interest on the partner's loan which was made in 2017.

On 01 July 2019, the partners agreed to share profits or losses equally and to record goodwill of $12,000. All the three partners would now be paid a monthly salary of $2,000 each. At the same time, all three partners have each contributed another $9,000 capital into the business to be used for expansion.

The net profit for the year ended 31 December 2019 was $87,000. Profits accrues evenly over the year. The accountant was finalising the partnership's Statement of Financial Position as at 31 December 2019 with some incomplete information:

$

Furniture & fittings, net 79,000

Motor Vehicle, at net 55,000

Cash at Bank 12,500

Inventory 17,500

Trade debtors 18,800

Goodwill 12,000

Capital - Andy ?

- Betty ?

- Charlie ?

Current -Andy ?

- Betty ?

- Charlie ?

Trade creditors 23,800

Loan from Betty 10,000

Accrued salaries 2,000

On 01 January 2020, Betty was left incapacitated permanently in car accident. According to their partnership agreement, the partnership is to be dissolved should any of the partners was unable to carry out his role.In light of Betty's condition, the following steps were taken to dissolve the partnership:

1.The inventory was sold at a profit of 10% and the motor vehicle were disposed off at a loss of 40%.

2.$15,800 was collected from the debtors while dissolution expenses amounted to $2,500.

3.Andy bought over some of the furniture and fittings at their net book value of $10,600.The remaining furniture and fittings were realised at $9,400.

4.The loan and accrued salaries were repaid in full while the trade creditors were settled at a discount of 15%.

5.It was agreed that the Garner vs Murray rule shall apply to any partners with capital deficiency and the rest of the partners will pay for him.

Required:

Prepare the Profit and Loss Appropriation Statement for the year ended 31 December 2019, the realisation account, partners' capital account and cash at bank account on 1 January 2020 upon the dissolution of the partnership in Excel. Round off your workings and answers to the nearest dollar.