Question 9

Brian and Adams were in partnership trading as BA Suppliers and they provide car wash services to clients. Profits and losses were shared in the ratio 2:3. In April 2019, they decided to liquidate the partnership by means of a simultaneous liquidation on 1 April 2019. The partners further agreed that deficits, if any, should be apportioned using the capital ratio. EXTRACT FROM THE STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2019 Furniture and fittings Goodwi. Bank Inventory Trade and other receivables Capital account: Brian. Capital account: Adams Current account: Brian (Cr) Current account: Adams (Cr) Revaluation surplus Loan from Capic Bank 350 000 80 000 300 000 72 000 sa92 000 55 000 140 000 38 000 47 000 110 000 285 000 On 1 April 2019 the assets were liquidated, and liabilities settled as follows: 1. Furniture and fitings were sold for R85 000 and inventory sold for R65 000 cash 2. The debtors accounts were settled and a settlement discount of R2 000 was granted 3. The loan from Capic bank was settled in full. 4. The creditors were paid R208 000 in full settlement of their accounts. 5. Liquidation expenses amounting to R43 000 were paid in full QUESTION 9 Which one of the following alternatives represents the correct settlement amount on the capital account of Brian after the liquidation distribution? 1. R4 000 2. R17 400 3. R21 400 4. R69 400