Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Saleem, Kareem and Asif are partners of a firm (Golden trading LLC) that deals in office furniture and office equipment's like computers, desk, cabinets, CCTVs,
Saleem, Kareem and Asif are partners of a firm (Golden trading LLC) that deals in office furniture and office equipment's like computers, desk, cabinets, CCTVs, etc.. Everything is going well and they have won various contacts in different institution and corporates including government and private sectors. But all of sudden Kareem has passed away. Kareem's wife has been appointed as his legal representatives to receive his share. Sharing profit and losses in the ratio of 3:5:2. Their Balance are below but some of ledger balances are missing: Golden Trading LLC Ledger Balances As on 30st April 2020 Name of Accounts Cash at Bank Sundry Debtors Stock Building Equipment Sundry Creditors OMR Name of Accounts 37,136 Saleem Capital 27,448 Kareem Capital 40,365 Asif Capital 80,730 General Reserve A/C 121,095 Furniture and Fixture 24,219 OMR 125,939 100,913 ? 20,990 29,063 Mr. Kareem died end of April 2020. The legal representative of the deceased partner entitled to receive his share after the following adjustments. a. Goodwill be valued at 4 year's purchase of the average profit of the last four years, Which were 2016 OMR 35,500; 2017 OMR 40,000; 2018 OMR 43,000; 2019 OMR 47,500. b. Building to be appreciated by OMR 90,500. c. Provision for doubtful debts to be made at 5% on debtor d. The assets are to be valued as, Furniture and Fixture at OMR 20,000 and Equipment be valued at OMR 110,000. e. For the purpose of calculating Kareem's share in the profit of 2020, the profit in 2020 should be taken to have been earned on the same as in 2019. f. A sum of OMR 30,000 is to be paid immediately to the executors of Saleem and the balance transferred to his loan account. You are required to pass necessary Journal entries with narrations to record the above transactions, prepare the Revaluation Account and Kareem executors account
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started