Required

Prepare all journal entries required to close off the old partnership.

Section C Partnership: Changes in Ownership 30 Marks Question 3 Study the scenario below and answer the question that follows: Jones and Smith Partnership The following balances occur in the books of Jones and Smith who currently share profits/losses equally. The given balances as at 30 June 2020 are: New values due to change in Description Carrying amount partnership ownership Capital Jones 3 000 Capital Smith 2 000 Current account: Jones (Dr) 100 Current Smith (Ch) 200 General reserve 1 000 Trade Accounts payable 2 400 Land and buildings 5 000 8 000 Trade Accounts Receivable 1 500 Bank (Dr) 500 Provision for credit losses 300 1 500 1 200 Inventories Goodwill 2 100 Jones and Smith will withdraw or pay in sums of money so that their net interest in the old partnership will be R5 000 each. . On the 1st of July they admit Brown as a partner and according to the new partnership agreement, he has to deposit a capital sum of R5 000 in the partnership's bank account. The partners decided that the general reserve should be re-instated in the books of the new partnership The new partners will share profits and losses equally and the new partnership will be known as JSB Partners Source: Mumie (2020) Section C Partnership: Changes in Ownership 30 Marks Question 3 Study the scenario below and answer the question that follows: Jones and Smith Partnership The following balances occur in the books of Jones and Smith who currently share profits/losses equally. The given balances as at 30 June 2020 are: New values due to change in Description Carrying amount partnership ownership Capital Jones 3 000 Capital Smith 2 000 Current account: Jones (Dr) 100 Current Smith (Ch) 200 General reserve 1 000 Trade Accounts payable 2 400 Land and buildings 5 000 8 000 Trade Accounts Receivable 1 500 Bank (Dr) 500 Provision for credit losses 300 1 500 1 200 Inventories Goodwill 2 100 Jones and Smith will withdraw or pay in sums of money so that their net interest in the old partnership will be R5 000 each. . On the 1st of July they admit Brown as a partner and according to the new partnership agreement, he has to deposit a capital sum of R5 000 in the partnership's bank account. The partners decided that the general reserve should be re-instated in the books of the new partnership The new partners will share profits and losses equally and the new partnership will be known as JSB Partners Source: Mumie (2020)