Question 1 (36 Marks) Melinda and Melissa are partners in a clothing design shop trading as M&M Boutique. They share profits and losses in the ration 2:1 On 30 June 2017, the statement of financial position was as follows: M& M Boutique Statement of financial position as at 30 June 2017 N$ NS Assets Non-Current Assets Land & Building Vehicles Goodwill Fumiture 300,000.00 60,000.00 90,000.00 30,000.00 480,000.00 Current Assets hventories Trade Receivable Bank 44,000.00 186,000.00 27,000.00 357,000.00 357,000.00 837,000.00 Total Assets Equity and Liabilities Equity Capital: Melinda Capital: Melissa Total Equity 450,000.00 225,000.00 675,000.00 Non-current liabilities Long-term borrowings 20,000.00 Current Liabilities Trade payable 42,000.00 Total current liabilities Total liabilitie s Total equity and liabilities 2,000.00 162,000.00 837,000.00 On 1 July 2017 the decided to admit Melintha to the partnership on the following conditions a) Assets should be re-valued as follows i. Land & buildings ii. Vehicles ii. Furniture iv. Goodwill v. Inventory vi. Trade receivable N$ 360, 000.00 N$ 54, 000.00 N$ 16, 000.00 N$ 120, 000.00 N$ 132, 000.00 N$ 180, 000.00 b) Melintha will obtain 1/5 share of partnership and it was agreed that she would pay a premium for good will for her share Melinda and Melissa will share the remaining profits in the ratio 3:2. Melinda and Melissa must make cash payments/withdrawals in order to get their capital balances in line with their profit-sharing ratio c) d) Goodwill should not be disclosed in the statement of financial position after admitting Melintha You are required to: 1. 2. 3. 4. Calculate the new profit sharing ratio after admission of Melintha on 01 July 2017. (4 marks) Provide the journal entries of the transactions above. (11 Marks) Prepare the capital accounts of the partners in columnar format. (9 marks) Prepare a statement of financial position of a partnership on 30 June 2017. (8 Marks)