The following information is presented for Setlagole Catering, a business in providing luxury catering services to the areas around the Dr Ruth Segomotsi Mompati District Municipality in the North West province.$$These are the balances when they commenced a simultaneous liquidation of the partnership:

EXTRACT OF BALANCESRTrade payables$53,900$Trade receivables$87,300$Catering equipment $($cost$)189,000$Vehicles $($at cost$)180,000$Catering equipment $($accumulated depreciation$)123,979$Vehicles $($accumulated depreciation$)67,500$Building $($at cost$)250,000$The following transactions took place as part of the liquidation:$1.$ Debtors were offered a $5\%$ settlement discount.$$ Only $94\%$ of the debtors settled their balances and the remainder of the debtors book was sold to a debt agency at $65\%$ discount$\mathrm{.}2.$ The creditors were all settled at a settlement discount of $11\%\mathrm{.}3.$ The vehicle and the building were auctioned off for R$112000$ and R$283300$ respectively$4.$ The catering equipment was sold to another local catering company for R$55000.$

Q$1.$Which one of the following alternatives represents the correct net profit $($or loss$)$ made on the simultaneous liquidation of Setlagole Catering? Your answer must be rounded off to the nearest rand.

a$.($R $21,200)$b$.$R $28,708$c$.$R $19,367$d$.$R $21,200$e$.($R $28,708)$f$.($R $170,279)$g$.($R $19,367)$h$.$R $170,279$

Q$2$: Which one of the following alternatives is false?

a$.$A simultaneous liquidation allows a partnership to continue with activities until the liquidation of all the assets is concluded.b$.$With a simultaneous liquidation, the liquidation account $($a profit or loss on liquidation$)$ is transferred to the partners' capital accounts in their profit$-$sharing ratio.c$.$In the case of a piecemeal liquidation, a liquidation account is prepared for each phase of the liquidation process.d$.$A piecemeal liquidation allows a partnership to continue with activities.e$.$With a simultaneous liquidation, a single liquidation account is prepared.f$.$A piecemeal liquidation will ensure that assets are realised at the best possible selling price.

Q$3$: Which one of the following alternatives is correct regarding the revaluation surplus in a partnership when there is a change in ownership?a$.$The revaluation surplus forms part of the equity of the partners and must allocated to the current accounts of the existing partners in their existing profit$-$sharing ratio.b$.$The revaluation surplus forms part of the equity of the partners and must allocated to the capital accounts of the existing partners in their existing profit$-$sharing ratio.c$.$The revaluation surplus forms part of the equity of the partners and must allocated to the capital accounts of the existing partners in their new profit$-$sharing ratio.d$.$The revaluation surplus forms part of the equity of the partners and will always be added to the current accounts of the existing partners with a debit balance.e$.$The revaluation surplus forms part of the equity of the partners and must allocated to the current accounts of the existing partners in their new profit$-$sharing ratio.f$.$The revaluation surplus forms part of the liabilities of the partnership and must allocated to reduce the capital accounts of the existing partners in their existing profit$-$sharing ratio.

Q$3$: Which one of the following alternatives is correct regarding the revaluation surplus in a partnership when there is a change in ownership?a$.$The revaluation surplus forms part of the equity of the partners and must allocated to the current accounts of the existing partners in their existing profit$-$sharing ratio.b$.$The revaluation surplus forms part of the equity of the partners and must allocated to the capital accounts of the existing partners in their existing profit$-$sharing ratio.c$.$The revaluation surplus forms part of the equity of the partners and must allocated to the capital accounts of the existing partners in their new profit$-$sharing ratio.d$.$The revaluation surplus forms part of the equity of the partners and will always be added to the current accounts of the existing partners with a debit balance.e$.$The revaluation surplus forms part of the equity of the partners and must allocated to the current accounts of the existing partners in their new profit$-$sharing ratio.f$.$The revaluation surplus forms part of the liabilities of the partnership and must allocated to reduce the capital accounts of the existing partners in their existing profit$-$sharing ratio.

Q$4$: Which one of the following alternatives is correct?

a$.$Since a partnership is a legal entity, the ownership of a partnership is vested in the partners, and not in the partnership.b$.$The retirement of a partner from a partnership does not require the calculation of a new profit$-$sharing ratio but a simple reallocation of a retired partners share.c$.$From the legal perspective, the activities of a dissolved and a subsequent new partnership are not separately accounted for and reported on$.$d$.$When a change in the ownership structure of a partnership occurs, a new partnership agreement is entered into by the new partners which causes the existing partnership to continue with its business operations without any interruptions.e$.$Since partnerships are not governed by a law requiring that IFRS be applied, it is not possible to introduce a standardised accounting procedure according to which changes in the ownership structure of partnerships ought to be recorded.

Q$5$: A change in the ownership structure of the partnership occurs when$1.$ When the partnership changes to operate in a completely new industry or market$2.$ When a new partner is admitted to the partnership$3.$ When a one of the partners dies$4.$ When a one of the partners retires$5.$ When a new profit$-$sharing ratio of the partnership is agreed upon and effectedWhich one of the following alternatives form part of the instances of a changes in partnership ownership structure?a$\mathrm{.}2,3,4$ and $5$b$\mathrm{.}1,3,4$ and $5$c$\mathrm{.}1,2,3$ and $5$d$\mathrm{.}1,2,4$ and $5$e$\mathrm{.}1,2,3$ and $4$f$.$All of the above

Q$6$: Which one of the following alternatives is incorrect?a$.$To ensure that compliance is followed, the financial statements of partnerships must be prepared according to IFRS.b$.$The selling price of the partnership business is determined by the value of its net assets.c$.$When recording the valuation adjustments, if the value of a liability is decreased, the valuation account credited with the amount of a decrease.d$.$The change in the ownership structure of the partnership is effectively the same as the dissolution.

Q$7$: Which one of the following alternatives is correct?a$.$To ensure that compliance is followed, the financial statements of partnerships must not be prepared according to IFRS.b$.$The selling price of the partnership business is determined by the value of its assets.c$.$The fair value of the assets of a partnership is equal to the total equity of a partnership.d$.$When recording the valuation adjustments, if the value of a liability is decreased, the valuation account is credited with the amount of the decrease.Q$8$: Which one of the following alternatives is correct regarding the liquidation of a partnership?a$.$The liquidation of a partnership implies that the assets of the partnership must be converted into cash, the liabilities must be added to the partners capital, debtors allocated to the partners according to their profit$-$sharing ratio, and the remaining cash must be paid to the partners to refund their capital accounts.b$.$The liquidation of a partnership implies that the assets of the partnership must be ceded to the creditors, the liabilities must be added to the partners capital, and the available cash must be paid to the partners to refund their capital accounts.c$.$The liquidation of a partnership implies that the assets of the partnership must be converted into cash, the liabilities must be settled, and the remaining cash must be paid to the partners to refund only their current accounts.d$.$The liquidation of a partnership is regarded as a form of dissolution that results in the termination of the business activities of solvent partnerships.e$.$The sequestration of a partnership is regarded as a form of dissolution of a solvent partnerships and its form and treatment is the same as the liquidation.f$.$The liquidation of a partnership implies that the assets of the partnership must be converted into cash, the liabilities must be added to the partners capital, and the remaining cash must be paid to the partners to refund their capital accounts.