QUESTION 1 Garcia and Martino are in partnership sharing profits and losses in the ratio 2:1. At 30 June 2020, their balance sheet was as follows: Garcia and Martino Balance Sheet as at 30 June 2020 $ S Non-current Assets Goodwill 40,000 Premises 70,000 Office equipment 25,000 Fixtures and fittings 20,000 155,000 Current Assets Stock 12,000 Accounts receivable 18,000 Bank 8,000 38,000 Current Liabilities Accounts payable 13,000 Working Capital 25,000 180,000 Capital Accounts Garcia 120,000 Martino 60,000 180,000 Zarita was admitted into the partnership on 1 July 2020 and it was agreed that all future profits and losses would be shared equally. Zarita introduced into the partnership, stock valued at $40,000, debtors of $5,000 and sufficient cash to cover his share of goodwill. At the same time, some assets and liabilities of the old partnership were revalued as follows: S Goodwill 60,000 Premises 120,000 Office equipment 15,000 Stock 12,600 Creditors 13,900