Q1.0

Given the following information for the four questions below:

Mpiyakhe and Phumasilwe are in the business of water purification and supply in a form of a partnership trading as Mhlathuze Water. The partners are sharing profits and losses equally.

On 30 July 2022 the following information was extracted from the accounting records of the partnership:

EXTRACT OF GIVEN INFORMATION FOR MHLATHUZE WATER
	R
Current account - Mpiyakhe (Dr)................................	39 700
Current account - Phumasilwe (Dr)...........................	24 800
Capital - Mpiyakhe.......................................................	108 900
Capital - Phumasilwe..................................................	96 500

Additional information

Mpiyakhe and Phumasilwe decided to admit Dlame from 1 August 2022.

Dlame will contribute the following to acquire a fifth of the net asset share of the partnership:

Cash........................................................................R18 300

Purification equipment worth..................................R49 800

Mpiyakhe and Phumasilwe agreed to relinquish 20% of their share in profits or losses to Dlame in the ratio of 3:1 respectively.

All other assets were revalued before admitting Dlame to the partnership.

A valuation loss was correctly calculated at R37 700

Q1.1

Which one of the following alternatives represents the new profit-sharing ratio after the admission of Dlame into the new partnership?

a.

2 : 2 : 1

b.

2 : 3 : 1

c.

2 : 1 : 2

d.

3 : 2 : 1

Q1.2

Which one of the following alternatives represents the correct balance in the capital account of Mpiyakhe after the valuation of assets and prior to the admission of Dlame?

a.

R 69 200

b.

R 148 600

c.

R 50 350

d.

R 167 450

Q1.3

Which one of the following alternatives represents the correct balance in the capital account of Phumasilwe after the valuation of assets and prior to the admission of Dlame?

a.

R 140 150

b.

R 52 850

c.

R 50 350

d.

R 71 700

Q1.4

Which one of the following alternatives represents the correct amount of goodwill in the accounting records of Mhlathuze Water after the admission of Dlame?

a.

R 273 000

b.

R 169 000

c.

R 169 200

d.

R 273 300