Question 6 and 7

GIVEN INFORMATION FOR QUESTIONS 6-7 Vusi and Nova are partnership trading as Vusi Nova Wholesalers. The partners share profits and losses equally. On 1 November 2018, they decided to admit Nathi into the partnership. The new profit-sharing ratio will be 2:2:1. Vusi Nova Wholesalers adopts the legal perspective in accounting for the change in the ownership structure of the partnership. The following information appeared in the accounting records of the partnership on 31 October 2018, the end of the financial year Extract of balances as at 31 October 2018: 220 000 220 000 23 000 35 000 490 000 110 000 70 000 10 000 Capital: Vusi (1 September 2017) Capital: Nova (1 September 2017) Current Account: Vusi (Cr) Current Account: Nova (Cr) Land and buildings at cost ehicles at cost Bank In preparation for the admission of Nathi, the following adjustments must be taken into account: 1. On 31 October 2018 the fair value of land and buildings was found to be R625 000. 2. One of the drivers of the partnership was involved in an accident with a delivery vehicle of the partnership. The original cost price of the vehicle was R60 000 and the vehicle was damaged beyond economic repair. On 31 October 2018, the date of the accident, the vehicle had an accumulated depreciation amounting to R32 000. The vehicle was only insured against the third party Upon joining the partnership, Nathi contributed cash of R45 000 and agreed to replace the delivery van by purchasing a new one at a cost of R115 000. 3. QUESTION 6 Which one of the following alternatives represents the correct amount of goodwill acquired in Vusi Nova Wholesalers 20187 1. R302 000 2. R142 000 3. R107 000 4. R 35 000 25 FAC1601/101/3/2019 ASSIGNMENT 01 - SECOND SEMESTER (continued) QUESTION 7 Which one of the following alternatives represents the correct amount allocated to Nova in the valuation account of Vusi Nova Wholesalers on 1 November 2018? 1. R53 500 2. R107 000 3. R302 000 4. R142 000