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Question 4 ( 2 5 Marks ) African Stars, Chula Chula and UNAM FC were in partnership selling soccer gear and accessories. They shared profits
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African Stars, Chula Chula and UNAM FC were in partnership selling soccer gear and accessories. They shared profits and losses in the ratio :: On January they decided to dissolve the partnership as Chula Chula was personally insolvent. The partnership's postclosing trial balance at that date was.
POSTCLOSING TRIAL BALANCE AS AT JANUARY
Details
Capital:
African Stars
Chula Chula
UNAM FC
Current accounts:
African Stars
UNAM FC
Loan UNAM FC
Mortgage bond
Accounts payable
Goodwill at cost
Land and Buildings at cost
Equipment at cost
Accumulated depreciation: Equipment
Inventory
Accounts receivable
Allowance for bad debts
Bank
Debit
Credit
The realisation transactions are summarised as follows:
African Stars agreed to take over the land and buildings for $ and assume liability for the mortgage bond.
The equipment and accounts receivable were disposed of for $ cash.
Inventory was sold by public auction for $
Paid auctioneer's fee of $
As the tangible assets have been disposed of separately, the goodwill has no value.
Paid payables $ in full settlement of their claims.
Divided the loss on realisation amongst the partners.
Paid UNAM FC N$ for his loan.
Divided Chula Chula's deficiency amongst African Stars and UNAM FC in the ratio :applying the rule in Garner vs Murray
Distributed the remaining cash to the partners.
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