Question 1 (20 marks, 30 minutes) Ndlovu Attorneys is a partnership between Nomthemba, Nandi, Njabulo and Ndumiso. The partners share profits in the ratio 1:2:4:5 respectively. On 31 July 2021, Nandi approached the partners to retire from the partnership. The trial balance of Ndlovu Attorneys on 31 July 2021 is shown below. Ndlovu Attorneys Trial balance as at 31 July 2021 Capital account - Nomthemba Capital account - Nandi DR CR R R 20 000 40 000 Capital account - Njabulo 80 000 Capital account - Ndumiso 100 000 Current account - Nomthemba 10 000 Current account - Nandi 6 000 Current account - Njabulo Current account - Ndumiso Land and buildings Plant and equipment Furniture Trade receivables Trade payables 2 000 10 000 900 000 150 000 12 000 16 000 Bank overdraft Sales Cost of sales Stationery Interest expense 475 000 28 000 5 000 1 299 000 1 500 1 500 1 578 000 1 578 000 The partnership decided that goodwill should not appear in the accounts of the partnership and that no private exchange will take place between the partners. On Nandi's retirement from the partnership on 31 July 2021, the following was discovered: 1. Land and buildings are considered to be valued at R1 250 000 2. Plant and machinery are considered to be valued at R120 000 3. Nomthemba, Njabulo and Ndumiso will shares profits in the ratio of 2:2:1 4. The partnership is considered to be worth R750 000 5. Nandi will be paid out in cash upon leaving the partnership 6. Nonthemba will contribute R150 000 more cash to the partnership after Nandi retires Required Marks 1. Calculate the value of goodwill upon Nandi retiring from the partnership 8 2. Calculate the balances that the new partnership (i.e. after Nandi's retirement) will reflect on the Statement of Financial Position for all the partner's capital accounts on 31 July 2021 9 N.B. Round all answers off to the nearest rand 3. List the items contained in a partnership agreement Total 3 20