Question 4 (20 Marks)

Mojo and Camilla are in partnership business with the sharing ratio of 3:2. The following trial balance was extracted from the books of the partnership at 31 December 2022:

Mojo and Camilla

Trial Balance as at 31 December 2022

RM

Debit

RM

Credit

Capital, 1 Jan:

Mojo

Camilla

Cash at bank

Accruals

Prepayments

Mojo, Drawing (at 30.6. 2022)

Camilla, Drawing (at 31.3.2022)

Building

Accumulated depreciation- building (at 31.12.2022)

Salary- Camilla

Net profit (for the year to 31.12.2022)

Inventory (at 31.12.2022)

Trade payables

Trade receivables

300,000

100,000

5,000

18,000

40,000

40,000

300.000

25,000

100.000

10.000

90,000

60,000

141.000

223.000

726,000 726,000

Additional information:

(a) The partnership agreement allows for Camilla to be paid a salary of RM20,000 per annum, and for interest of 5 per cent per annum to be paid on the partners' capital account balances as at

1 January in each year. Interest at a rate of 10 per cent per annum is charged on the partners' drawings.

(b) The partners decide to dissolve the partnership as at 31 December 2022, and the business was then sold to Valley Berhad. The purchase consideration was to be 400,000 at RM1.25 ordinary shares in Valley Berhad. The shares were to be issued to the partners on 31 December 2022 and they were to be shared between them in their profit-sharing ratio. The sale agreement allowed Mojo to take over one of the business cars at an agreed valuation of RM10,000. Apart

from the car and the cash and bank balances, the company took over all the other partnership assets and liabilities at their book values as at 31 December 2022.

(c) Matters relating to the appropriation of profit for the year to 31 December 2022 are to be dealt with in the partners' capital accounts, including any arrears of salary owing to Camilla.

Required:

(i) Prepare following accounts for the year to 31 December 2022:

1. the profit and loss appropriation account;
2. Mojo and Camilla's capital accounts; and
3. the realisation account.

(ii) Prepare Valley's financial position as at 1 January 2023 immediately after the acquisition of the partnership and assuming that no further transactions have taken place in the meantime. Disclose clearly on the goodwill arise (if any) from the business acquisition.

Question 4 (20 Marks] Mojo and Camilla are in partnership business with the sharing ratio of 3:2. The following trial balance was extracted from the books of the partnership at 31 December 2022: Additional information: (a) The partnership agreensent allows for Camila to be paid a salary of Ra20,000 per annum, and for interest of $ per cent per annum to be paid on the partners' capital account balances as at 1 lanvary in each yeat. Interest at a rate of 10 per cent per annum is charged on the partners' drawings (b) The partners decide to dissolve the partnership as at 31 December 2022, and the business was then sold to Valley Bectuad. The purchase consideration was to be 400,000 at RM1.25 ordinary shares in Valley Bertad. The shares were to be asued to the partnees on 31 December 2022 and they were to be shared between them in their profit-sharing ratio. The swle agreement allowed Mojo to take over one of the butiness cars at an agreed valuation of RM10,000. Apart from the car and the cash and bank balances, the company took over all the other partnership assets and lobilties at their book values as at 31 December 2022. (c) Matters relating to the appropriation of prolit for the vear to 31 Deccember 2022 are to be deat with in the partners" copital accounts, including any arrears of salary owing to Camilla. Required: (i) Prepare following accounts for the vear to 31 December 2022: a. the profit and loss appropriation account; b. Mojo and Camilla's capital accounts; and c. the realisation account. (ii) Prepare Valey's financial position as at 1 January 2023 immediately after the acquisition of the partnership and assuming that no further transactions have taken place in the meantime. Dsclose clearly on the goodwill arise (if any) from the bosiness acquisition