Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 4 ( 2 5 Marks ) African Stars, Chula Chula and UNAM FC were in partnership selling soccer gear and accessories. They shared profits

Question 4
(25 Marks)
African Stars, Chula Chula and UNAM FC were in partnership selling soccer gear and accessories. They shared profits and losses in the ratio 3:5:2. On 01 January 2022, they decided to dissolve the partnership as Chula Chula was personally insolvent. The partnership's postclosing trial balance at that date was.
POST-CLOSING TRIAL BALANCE AS AT 01 JANUARY 2022
Details
Capital:
African Stars
Chula Chula
UNAM FC
Current accounts:
African Stars
UNAM FC
Loan UNAM FC
8% 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
19000
6000
10000
1000
2000
2000
6000
8800
12000
18000
4000
10050
6500
6350
56900
56900
The realisation transactions are summarised as follows:
African Stars agreed to take over the land and buildings for $20000 and assume liability for the mortgage bond.
The equipment and accounts receivable were disposed of for N$7400 cash.
Inventory was sold by public auction for N$6350.
Paid auctioneer's fee of N$100.
As the tangible assets have been disposed of separately, the goodwill has no value.
Paid payables N$8400 in full settlement of their claims.
Divided the loss on realisation amongst the partners.
Paid UNAM FC N$2000 for his loan.
Divided Chula Chula's deficiency amongst African Stars and UNAM FC in the ratio 5:3(applying the rule in Garner vs Murray).
Distributed the remaining cash to the partners.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Petroleum Accounting: Principles, Procedures; And Issues

Authors: Dennis Jennings, John Brady, Rich Shappard, Craig Friou

8th Edition

0940966328, 978-0940966321

More Books

Students also viewed these Accounting questions

Question

1. Letters and diaries in history.

Answered: 1 week ago

Question

What is the major competition for your organization?

Answered: 1 week ago

Question

How accurate is this existing information?

Answered: 1 week ago