Question
Question Paul, Peter and Steve are partners in an office supply business. The following is their balance sheet as at 2021 June 30. The partners
Question
Paul, Peter and Steve are partners in an office supply business. The following is their balance sheet as at 2021 June 30.
The partners share profits in the ratio of 2:2:1. On 2021 June 30, they decided to terminate the partnership. i. Paul took over a delivery van which had a book value of $1 000 at a valuation of $2 500. ii. Steve took over stock at a valuation of $6 000 which had cost $6 560. iii. A ready buyer was found for the premises, the remaining delivery vans, fixtures and fittings and the balance of stock, at an agreed price of $11 500. iv. Debtors realised the sum of $3 225. v. After creditors had been paid in full, the partners received monies due to them on their capital accounts or paid what was due to the firm.
Prepare the following ledger accounts for dissolution of the partnership: A. Realisation account. B. Bank account. C. Partners capital accounts. D. Partners capital accounts if one partner is unable to pay the amount owed to the partnership.
Cost | Depreciation | Net | |
Non-Current Assets |
|
|
|
Leasehold premises | 21 000 | 16 000 | 5 000 |
Delivery vans | 7 000 | 5 000 | 2 000 |
Fixtures | 3 000 | 1 000 | 2 000 |
31 000 | 22 000 | 9 000 | |
Current Assets |
|
|
|
Inventory |
| 12 000 |
|
Accounts receivables |
| 3 400 | 15 400 |
|
| 24 400 | |
Capital and Liabilities |
|
|
|
Capital Accounts |
|
|
|
Paul |
| 5 000 |
|
Peter |
| 2 000 |
|
Steve |
| 2 000 | 9 000 |
Current Accounts |
|
|
|
Paul |
| 3 400 |
|
Peter |
| 2 500 |
|
Steve |
| 1 700 | 7 600 |
Long-term loan |
|
| 3 000 |
Current Liabilities |
|
|
|
Accounts payables |
| 3 900 |
|
Bank overdraft |
| 900 | 4 800 |
|
| 24 400 |
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