QUESTION 1 (20 marks) Kitchen Licken is a partnership that sells savoury products such as sandwiches, pastries, etc., and has been operated by Eisha and Wilma for many years. Eisha and Wilma share all profits and losses in the ratio of 3:1 respectively which is also the ratio of their fixed capital. Wilma decided to go back to university to complete her Actuarial Sciences Degree after a recession in the economy lead to a decrease in the partnerships customers. Eisha does not want to run Kitchen Licken alone and thus they resolved to stop trading and liquidate the partnership at the end of the current financial year ending 30 June 2022. The assets and liabilities as per the partnerships Statement of Financial Position for the financial year ended 30 June 2022 are as follow: R Vehicles: Cost 650 000 Vehicles: Accumulated depreciation (200 000) Inventory 175 000 Trade receivables 150 000 Cash 120 000 Trade payables (100 000) Current account: Eisha (Equity) 50 000 Current account: Wilma (Equity) (70 000) Capital account: Eisha ? Capital account: Wilma ? The following transactions occurred during July 2022 in liquidating the partnership:

The partnership had two vehicles. A vehicle with a carrying value of R200 000 was sold for R170 000.

The other vehicle with a carrying value of R250 000 was taken from the partnership by Eisha at carrying value i.e. it was decided that she could keep this vehicle.

The trade payables were paid in full in July 2022.

The trade receivable balance was received in full in July 2022.

The remaining inventory was sold for R130 000 and the money received in July 2022.

Dissolution expenses paid by the partnership amounted to R25 000.

REQUIRED:

1.1 Prepare the Liquidation General Ledger account for Kitchen Licken as at 30 June 2022. VAT and South African Income Taxation may be ignored.

1.2 Calculate the cash amount to be paid to each of the partners at the end of the liquidation process when the partnership is dissolved.