Post on 17-Sep-2018
Prepare Financial Statements - Solutions
30
Chapter 4.1: Formation of a Partnership
Chapter Review Solutions
2. Col & Don
General Journal
Date Particulars Debit Credit Bank 100,000 Capital - Col 80,000 Capital - Don 20,000 Capital contributions by Col and Don
4. Roo & Roy
General Journal
Date Particulars Debit Credit Motor Vehicle 30,000 Premises 16,000 Furniture 4,000 Capital - Roo 50,000 Capital contribution by Roo
Bank 50,000 Capital - Roy 50,000 Capital contribution by Roy
6. John & Kay
Date Particulars Debit Credit Business Premises 100,000 Motor Vehicles 50,000 Inventory 50,000 Capital – John 200,000 Capital contribution by John
Bank 200,000 Capital – Kay 200,000 Capital contribution by Kay
8. Noel & Oscar
Date Particulars Debit Credit Land & Buildings 200,000 Inventory 20,000 Motor Vehicle 30,000 Mortgage 100,000 Capital - Noel 150,000 Capital contribution by Noel
Plant & Equipment 30,000 Bank 50,000 Accounts Receivable 30,000 Accounts Payable 10,000 Capital - Oscar 100,000 Capital contribution by Oscar
Chapter 4: Partnerships - Solutions
31
10. Cec & Des
Date Particulars Debit Credit Bank 6,000 Accounts Receivable 3,000 Inventory 31,000 Motor Vehicle 5,000 Accounts Payable 8,000 Loan 22,000 Capital - Cec 15,000 Cec's business brought into partnership as capital
Accounts Receivable 8,000 Inventory 12,000 Premises 40,000 Bank (Overdraft) 30,000 Capital - Des 30,000 Des's business brought into partnership as capital
12. Alpha, Beta & Gamma Note no Bank Overdraft for Gamma
Date Particulars Debit Credit Bank 50,000 Capital - Alpha 50,000 Capital contribution by Alpha
10,000
Bank Motor Vehicle 12,000 Equipment 28,000 Capital - Beta 50,000 Capital contribution by B
Inventory 20,000 Plant 30,000 Accounts Receivable 4,000 Office Equipment 4,000 Accounts Payable 8,000 Capital - Gamma 50,000 Gamma's business brought into partnership as capital
14. E & F Note Motor Vehicle has an agreed value of $18,000
Date Particulars Debit Credit Inventory 20,000 Accounts Receivable 15,000 Motor Vehicles 18,000 Fixtures 8,000 Allowance for Doubtful Debts 1,000 Bank (Overdraft) 2,000 Loan 8,000 Capital - E 50,000 Assets and Liabilities of E's business brought in as Capital.
Bank 50,000 Capital - F 50,000 Capital contribution by F
Prepare Financial Statements - Solutions
32
16. G & H Date Particulars Debit Credit
( a ) Bank 30,000 Capital – G 30,000
Capital contribution by G
Bank 30,000 Capital – H 30,000 Capital contribution by H
( b ) Inventory 50,000 Accounts Receivable 10,000
Land & Buildings 80,000 Fixtures & Fittings 20,000 Goodwill 10,000 Bank (Overdraft) 20,000 Accounts Payable 40,000 Mortgage 50,000 J (Vendor) 60,000 Purchase of business from J
( c ) J (Vendor) 60,000 Bank 60,000
Payment of purchase consideration to J
Chapter 4: Partnerships - Solutions
33
18. P Q & R
Date Particulars Debit Credit
( a ) Land & Buildings 100,000 Plant & Machinery 40,000 Inventory 15,000 Accounts Receivable 10,000 Bank 15,000 Accounts Payable 30,000 Capital – P 150,000 Assets & Liabilities of P's business brought in as Capital.
Plant & Machinery 35,000 Inventory 20,000 Accounts Receivable 15,000 Bank 56,000 Allowance for Doubtful Debts 1,000 Accounts Payable 5,000 Capital – Q 120,000 Assets & Liabilities of Q's business brought in as Capital.
( b ) Land & Buildings 60,000 Plant & Machinery 25,000 Inventory 30,000 Accounts Receivable 5,000 Goodwill 10,000 Accounts Payable 20,000
R (Vendor) 110,000 Purchase of business from R
R (Vendor) 110,000 Bank 110,000
Payment of purchase consideration to R
( c ) Balance Sheet of P & Q
Current Assets
Inventory 65,000
Accounts Receivable 30,000
Less: Allowance for Doubtful Debts 1,000 29,000 94,000
Non Current Assets
Land & Buildings 160,000
Plant & Machinery 100,000
Goodwill 10,000 270,000
Total Assets 364,000
Current Liabilities
Bank (overdraft) 39,000
Accounts Payable 55,000 94,000
Total Liabilities 94,000
Net Assets 270,000
Proprietorship Capital - P 150,000
Capital - Q 120,000 270,000
Prepare Financial Statements - Solutions
34
20. M & N
Date Particulars Debit Credit Bank 6,000 Accounts Receivable 13,000 Inventory 23,000 Van 13,000 Allowance for Doubtful Debts 1,000 Accounts Payable 17,000 Loan 10,000 Capital – M 27,000 Business of M introduced as Capital
Accounts Receivable 8,000 Inventory 12,000 Premises 80,000 Accounts Payable 7,000 Mortgage 30,000 Capital - N 63,000 Business of N introduced as Capital
Bank 3,000 Capital - M 3,000 Additional Capital contribution required Capital - N 3,000 Current - N 3,000 Transfer of excess Capital
22. Ultra & Violet
Date Particulars Debit Credit
( a ) Bank 100,000 Capital – Ultra 100,000
Capital contribution by Ultra
Bank 100,000 Capital – Violet 100,000 Capital contribution by Violet
( b ) Machinery 60,000 Office Equipment 30,000 Accounts Receivable 45,000 Inventory 40,000
Goodwill 50,000 Allowance for Doubtful Debts 5,000 Accounts Payable 20,000 Ray (Vendor) 200,000 Purchase of business from Ray
( c ) Ray (Vendor) 200,000 Bank 200,000
Payment of purchase consideration to Ray
Chapter 4: Partnerships - Solutions
35
Chapter 4.2: Operation of a Partnership
Chapter Review Solutions
2. Charles & Dennis
Debit Credit
Interest on Partner’s Loan - Charles 10,000 Capital / Current – Charles 10,000 Interest credited on loan from Charles Capital / Current – Dennis 5,000 Interest on Loan (Advance) to Partner - Dennis 5,000 Interest charged on loan to Dennis Profit & Loss 10,000 Interest on Partner’s Loan 10,000 Balance transfer Interest on Loan to Partner 5,000 Profit & Loss 5,000 Balance transfer
4. Rex & Grace Debit Credit ( a ) Cash at Bank 60,000 01/07/10 Capital – Rex 20,000 Capital – Grace 40,000 Capital contributions by Rex and Grace
( b ) Cash at Bank 30,000 01/01/11 Loan from Partner - Grace 30,000 Loan by Grace to partnership
( c ) Partners’ Salaries 20,000
30/06/11 Current – Rex 20,000 Partner’s salary credited to Rex
( d ) Interest on Partner’s Loan 1,500 Cash at Bank 1,500 Interest on Partner’s Loan paid to Grace
( e ) Profit & Loss Appropriation 12,000 Current – Rex 4,000 Current - Grace 8,000 Interest on capitals credited
( f ) Current – Rex 2,500 Current - Grace 3,500 Profit & Loss Appropriation 6,000 Interest charged on Drawings
( g ) Profit & Loss 78,500 Profit & Loss Appropriation 78,500 Net Profit transfer ($100,000 - $20,000 - $1,500 )
( h ) Current - Rex 20,000 Capital - Rex 20,000 Balance transfer
Prepare Financial Statements - Solutions
36
6. Rob & Roy ( a ) Profit & Loss for the year ended ………… Partners’ Salaries 20,000 Gross Profit from Trading 83,000 Interest on Partner’s Loan 2,000 Interest on Advance to Partner 1,000 Net Profit to Appropriation 62,000
84,000 84,000
( b ) Profit & Loss Appropriation for the year ended ……………..
Interest on Capital Net Profit from Profit & Loss 62,000 - Rob 3,000 Interest on Drawings - Roy 3,000 6,000 - Rob 1,000
Share of Profit - Roy 2,000 3,000 - Rob 29,500 - Roy 29,500 59,000
65,000 65,000
( c ) General Journal
Date Particular Debit Credit
Partners’ Salaries 20,000 Current – Rob 10,000 Current - Roy 10,000 Partners’ salaries credited
Interest on Partner’s Loan 2,000 Current – Rob 2,000 Interest credited on loan from Rob
Current – Roy 1,000 Interest on Advance to Partner 1,000 Interest charged on advance to Roy
Profit & Loss 22,000 Partners’ Salaries 20,000 Interest on Partner’s Loan 2,000 Balances transfer
Interest on Advance to Partner 1,000 Profit & Loss 1,000 Balance transfer
Profit & Loss 62,000 Profit & Loss Appropriation 62,000 Net Profit transfer (83,000 – 22,000 + 1,000)
Profit & Loss Appropriation 6,000 Current – Rob 3,000 Current – Roy 3,000 Interest on capital credited
Current – Rob 1,000 Current – Roy 2,000 Profit & Loss Appropriation 3,000 Interest charged on Drawings
Profit & Loss Appropriation 59,000 Current – Rob 29,500 Current – Roy 29,500 Share of Profit transfer (62,000 – 6,000 + 3,000)
Chapter 4: Partnerships - Solutions
37
8.
( a ) General Journal of Matthew, Mark & Luke Date Particular Debit Credit 30/06/11 Trading 150,000 Profit & Loss 150,000 Gross Profit transferred
Partners' Salaries 30,000 Current – Luke 30,000 Salary credited to partner Luke
Interest on Partner's Loan 2,000 Current – Mark 2,000 Interest on loan from Mark credited
Profit & Loss 102,000 Operating Expenses 70,000 Partners' Salaries 30,000 Interest on Partner's Loan 2,000 Balances transfer
Profit & Loss 48,000 Profit & Loss Appropriation 48,000 Net Profit transfer
( b )
Profit & Loss Appropriation for the year ended 30 June 2011 Interest on Capital Net Profit from Profit & Loss 48,000
- Matthew 3,000 Interest on Drawings - Mark 2,000 - Matthew 700 - Luke 1,000 6,000 - Mark 700
Share of Profit - Luke 600 2,000 - Matthew 22,000
- Mark 11,000 - Luke 11,000 44,000
50,000 50,000
Prepare Financial Statements - Solutions
38
( c ) 30/06/11 Profit & Loss Appropriation 6,000 Current – Matthew 3,000 Current - Mark 2,000 Current – Luke 1,000 Interest on capital credited
Current – Matthew 700 Current – Mark 700 Current – Luke 600 Profit & Loss Appropriation 2,000 Interest charged on Drawings
Profit & Loss Appropriation 44,000 Current - Matthew 22,000 Current - Mark 11,000 Current - Luke 11,000 Share of Profit transfer
( d )
Current – Matthew
Drawings 14,000 Balance b/d 5,000 P & L Appropriation P & L Appropriation - Interest on Drawings 700 - Interest on Capital 3,000 Balance c/d 15,300 P & L Appropriation - Share of Profit 22,000
30,000 30,000
Current – Mark Drawings 14,000 Balance b/d 5,000 P & L Appropriation Interest on Partners' Loan 2,000 - Interest on Drawings 700 P & L Appropriation Balance c/d 5,300 - Interest on Capital 2,000 P & L Appropriation - Share of Profit 11,000
20,000 20,000
Current – Luke Drawings 12,000 Balance b/d 4,000 P & L Appropriation Partners' Salaries 30,000 - Interest on Drawings 600 P & L Appropriation Balance c/d 33,400 - Interest on Capital 1,000 P & L Appropriation - Share of Profit 11,000
46,000 46,000
Chapter 4: Partnerships - Solutions
39
10. Crosby, Stills & Nash
( Extracts of ) Balance Sheet as at 30 June 2012
Current Assets Advance to Nash (due 31/10/2012) 10,000 Non-Current Liabilities Loan from Partner - Crosby (due 1/03/2014) 20,000 Proprietorship Crosby - Capital 50,000 - Current 10,000 60,000 Stills - Capital 50,000 - Current 15,000 65,000 Nash - Capital 50,000 - Current - 5,000 45,000 170,000
Prepare Financial Statements - Solutions
40
12. Song, Sung & Blue
( a ) Profit & Loss Appropriation for the year ended 30 June 2011
Interest on Capital Net Profit from Profit & Loss 14,600 - Song 3,000 ( 67,100 - 52,500) - Sung 2,500 Interest on Drawings
- Song 2,000 - Sung 1,500 - Blue 800
- Blue 2,000 7,500 Share of Profit 4,300 - Song (1/3) 3,800 - Sung (1/3) 3,800 - Blue (1/3) 3,800 11,400
18,900 18,900
( b ) Current Accounts
Song Sung Blue Song Sung Blue
Drawings 20,000 15,000 8,000 Balance b/d 14,000 8,000 2,000
Capital 10,000 10,000 10,000 Partners Salaries 15,000 17,500 20,000
P&L App P&L App
Interest on Draw 2,000 1,500 800 Interest on Capital 3,000 2,500 2,000
Balance c/d 3,800 5,300 9,000 Share of Profit 3,800 3,800 3,800
35,800 31,800 27,800 35,800 31,800 27,800
( c )
Balance Sheet of Song, Sung & Blue as at 30 June 2011
Current Assets Accounts Receivable 84,000 Less Allowance for Doubtful Debts 1,130 82,870
Inventory 80,000 Bank 54,600 217,470
Non Current Assets Fixtures & Fittings 14,400 Less Accumulated Depreciation 1,440 12,960
Motor Vehicles 74,000 Less Accumulated Depreciation 37,000 37,000 49,960
Total Assets 267,430
Current Liabilities Accounts Payable 69,330 69,330
Net Assets 198,100 Proprietorship Song – Capital 70,000 - Current 3,800 73,800
Sung – Capital 60,000 - Current 5,300 65,300
Blue - Capital 50,000
- Current 9,000 59,000 198,100
Chapter 4: Partnerships - Solutions
41
14. Bob, Ted & Alice ( a ) Profit & Loss for the year ended 30 June…… Operating Expenses 110,000 Trading - Gross Profit 560,000 Partner's Salary 50,000 Interest on Partner's Loan 900 Profit & Loss Appropriation
- Net Profit 399,100 560,000 560,000
( b )
Profit & Loss Appropriation for the year 30 June ………
Interest on Capital Net Profit from Profit & Loss 399,100 - Bob 5,000 Interest on Drawings - Ted 5,000 - Bob 8,700 - Alice 2,500 12,500 - Ted 5,700 Share of Profit - Alice 13,500 27,900 - Bob 165,800 - Ted 165,800 - Alice 82,900 414,500
427,000 427,000
( c )
Current - Bob
Drawings 58,000 Balance b/d 35,000 P & L Appropriation Interest on Partners' Loan 900 - Interest on Drawings 8,700 P & L Appropriation Balance c/d 140,000 - Interest on Capital 5,000 P & L Appropriation - Share of Profit 165,800
206,700 206,700
Current - Ted
Drawings 38,000 Balance b/d 30,000 P & L Appropriation P & L Appropriation - Interest on Drawings 5,700 - Interest on Capital 5,000 Balance c/d 157,100 P & L Appropriation - Share of Profit 165,800
200,800 200,800
Current - Alice
Drawings 90,000 Balance b/d 20,000 P & L Appropriation Partners' Salaries 50,000 - Interest on Drawings 13,500 P & L Appropriation Balance c/d 51,900 - Interest on Capital 2,500 P & L Appropriation - Share of Profit 82,900
155,400 155,400
Prepare Financial Statements - Solutions
42
Chapter 4.3: - Introduction of a New Partner
Chapter Review Solutions
2. Cliff, Ford & Tex
( a ) 15 : 5 : 4 Cliff = 3/4 x 5/6 = 15/24 Ford = 1/4 x 5/6 = 5/24 Tex = 1/6 = 4/24
( b ) General Journal of Cliff, Ford & Tex Debit Credit
Bank 26,000 Capital - Tex 26,000 Capital contribution by Tex
4 Bill, Ian & Gary
( i ) Equity Adjustment
Motor Vehicles 10,000 30/06/08 Plant 2,000
Allowance for Doubtful Debts 1,000 Land & Buildings 12,000
Capital - Bill 1,500
Capital – Ian 1,500 3,000
14,000 14,000
( ii ) General Journal Debit Credit
Bank 54,000 Capital - Gary 54,000 Capital contribution by Garry
( a ) Calculation of new profit-sharing ratio
Bill ½ x 2/3 1/3
Ian ½ x 2/3 1/3
Gary 1/3
Chapter 4: Partnerships - Solutions
43
6. Tom, Jerry & Sylvester
( a ) Debit Credit
( i ) Bank 10,000 Capital – Sylvester 10,000 Capital contribution by Sylvester
( ii ) 9 : 6 : 5 Tom 3/5 x 3/4 = 9/20 Jerry 2/5 x 3/4 = 6/20 Sylvester 1/4 = 5/20
( b ) Debit Credit
Equity Adjustment 10,000 Allowance for Doubtful Debts 2,000 Inventory 1,000 Equipment & Vehicles 7,000 Adjustment of asset values - decreases
Land & Buildings 40,000 Equity Adjustment 40,000 Adjustment of asset value - increases
Equity Adjustment 30,000 Capital - Tom 18,000 - Jerry 12,000 Transfer of balance of adjustments of assets
Prepare Financial Statements - Solutions
44
8. Roo, Rob & Max
( a ) Equity Adjustment
Motor Vehicles 10,000 Plant 2,000 Allow for Doubtful Debts 1,000 Land & Buildings 20,000 Capital - Roo 5,500 Capital - Rob 5,500 11,000
22,000 22,000
( b ) Debit Credit
Bank 54,000 Capital – Max 54,000 Capital contribution by Max
( c ) 1 : 1 : 1 Roo = 1 / 2 x 2 / 3 = 1 / 3 Rob = 1 / 2 x 2 / 3 = 1 / 3 Max = 1/3 = 1 / 3
10. A, B & C
( a ) Equity Adjustment
Allow for Doubt. Debts 1,000 Land & Buildings 65,000 Vehicles & Equipment 6,000 Inventory 2,000
Capital - A 40,000 Capital - B 20,000
67,000 67,000
( b ) Capital - A
Balance c/d 120,000 Balance b/d 72,000 Equity Adjustment 40,000 Bank 8,000
120,000 120,000
Capital - B Balance c/d 60,000 Balance b/d 28,000 Equity Adjustment 20,000 Bank 12,000
60,000 60,000
Capital - C
Bank 120,000
Chapter 4: Partnerships - Solutions
45
( c )
Balance Sheet
Current Assets Bank 140,000 Accounts Receivable 10,000 Less: Allowance for Doubtful Debts 1,000 9,000
Inventory 17,000 166,000
Non-Current Assets Land and Buildings 185,000 Vehicles and Equipment 15,000 200,000
Total Assets 366,000 Liabilities 66,000
Net Assets 300,000
Proprietorship Capital - A 120,000 Capital - B 60,000 Capital - C 120,000 300,000
300,000
Prepare Financial Statements - Solutions
46
12. Victor, Walter & Xavier
( a ) Debit Credit
Inventory 15,000
Equity Adjustment 15,000
Asset value increases
Equity Adjustment 26,000
Office Equipment 25,000
Allowance for doubtful debts 1,000
Asset value decreases
Victor, Walter & Xavier continued
Capital / Current - Victor 7,333
Capital / Current - Walter 3,667
Equity Adjustment 11,000
Balance transferred
( b ) Equity Adjustment
Office Equipment 25,000 Inventory 15,000 Allowance for doubtful debts 1,000 Capital / Current
- Victor 7,333
- Walter 3,667 11,000
26,000 26,000
( c ) Debit Credit
Bank 60,000 Capital – Xavier 60,000 Admission to partnership of Xavier
( d ) Calculation of new Profit Sharing Ratio
2 : 1 : 1 Workings: Victor = 2/3 x 3/4 = 2/4 Walter = 1/3 x 3/4 = 1/4 Xavier = = 1/4
Chapter 4: Partnerships - Solutions
47
Chapter 4.4: Dissolution of a Partnership
Chapter Review Solutions
2.
( a ) Debit Partners Salaries xxx
Credit Capital – A xxx
Salary to date credited
( b ) Debit Profit & Loss Appropriation xxx
Credit Capital – A xxx
Interest on Capital to date, credited
( c ) Debit Profit & Loss Appropriation xxx
Credit Capital – A xxx
Share of estimated partnership profit
( d ) Debit Equity Adjustment xxx
Credit Capital – A xxx
Share of profit on asset revaluations
( e ) Debit Loan by Partner A xxx
Credit Capital – A xxx
Transfer of Loan account balance
4. Gary, Harry & Larry
( a ) Current – Larry 10,000 Capital – Larry 10,000 Transfer of balance
Capital – Larry 15,000 Drawings – Larry 15,000 Transfer of balance
Loan from Larry 25,000 Capital – Larry 25,000 Transfer of balance
Profit & Loss Appropriation 20,000 Capital – Larry 20,000 Share of profit to date ($60,000 x 1/3)*
Partners’ Salaries 10,000 Capital – Larry 10,000 Salary credited ($20,000 x 6/12)
Profit & Loss Appropriation 3,000 Capital – Larry 3,000 Interest on capital credited ($60,000 x 10% x 6/12)
Capital – Larry 1,500 Profit & Loss Appropriation 1,500 Interest charged on drawings ($15,000 x 10%)
Interest on Partner’s Loan 1,250 Capital – Larry 1,250 Interest on loan credited ($25,000 x 10% x 6/12)
Equity Adjustment 5,000 Capital – Larry 5,000 Share of profit on asset revaluations ($15,000 x 1/3)
Prepare Financial Statements - Solutions
48
The following have been determined ( after any adjustments ):*
Partnership profit to 31 December 2011 $60,000
( b ) Capital – Larry 31/12/11 Drawings 15,000 01/07/11 Balance 60,000
P & L Appropriation 31/12/11 Current – Larry 10,000 - interest - drawings 1,500 Loan from Larry 25,000 Bank 117,750 Partners’ Salaries 10,000 P & L App'n - interest on capital 3,000 Interest on L’s Loan 1,250
P & L App'n - share of profit 20,000 Equity Adjustment 5,000
134,250 134,250
( c ) 01/01/12 Capital - Larry 117,750 Cash at Bank 117,750 Payment to Larry of Capital account balance
Chapter 4: Partnerships - Solutions
49
6. E & F Realisation
Other Assets 17,500 Bank - Proceeds 24,000
Bank - Expenses 700 Accounts Payable – Discounts 200 Capital – Profit on Realisation
- E 3,000
- F 3,000 6,000
24,200 24,200
Bank
Balance c/d Realisation - Proceeds
2,500 Loan Accounts Payable Realisation - Expenses Capital - E - F
3,000 24,000 3,800
700 11,000 8,000
26,500 26,500
Capital - E
Bank 11,000 Balance b/d Realisation - Profit
8,000 3,000
11,000 11,000
Capital - F
Bank 8,000 Balance b/d Realisation - Profit
5,000 3,000
8,000 8,000
Prepare Financial Statements - Solutions
50
8. R & S Realisation
Other Assets Bank - Expenses Loan - Interest Capital - Profit on Realisation - R 3,750 - S 3,750
17,500 Bank - Proceeds Accounts Payable - Discounts
25,000
400 500
100
7,500
25,500 25,500
Bank Balance b/d Realisation - Proceeds
1,500 Loan (and interest) Accounts Payable Realisation - Expenses Capital - R - S
3,100 25,000 4,000
400 10,250 8,750
26,500 26,500
Capital - R Bank 10,250 Balance b/d
Current Realisation - Profit
4,000
2,500
3,750
10,250 10,250
Capital - S Bank 8,750 Balance b/d
Current Realisation - Profit
4,000
1,000
3,750
8,750 8,750
Chapter 4: Partnerships - Solutions
51
10. D, E and F
Realisation
Sundry Assets Bank - Expenses Capital - Gain on Realisation - D 1,500 - E 1,500 - F 1,500
14,000 Bank - Proceeds Accounts Payable - Discounts
18,450
150 200
4,500
18,650 18,650
Bank
Realisation - Proceeds Capital – F
18,450 Balance b/d Accounts Payable Realisation - Expenses Capital - D - E
2,000
500 3,800
150
7,500
5,500
18,950 18,950
Capital - D
Bank 7,500 Balance b/d Realisation - Gain
6,000
1,500
7,500 7,500
Capital - E
Bank 5,500 Balance b/d Realisation - Gain
4,000
1,500
5,500 5,500
Capital - F
Balance b/d 2,000 Realisation - Gain Bank
1,500
500
2,000 2,000
Prepare Financial Statements - Solutions
52
12. Betty and Maxwell
Realisation
Bank Other Assets Capital- Betty 20,000 Capital- Maxwell 20,000
10,000 Accounts Payable Betmax Pty Ltd - purchase consideration
40,000
190,000
40,000 200,000
240,000 240,000
Betmax Pty. Ltd
Realisation - consideration 200,000 Capital - Betty 100,000
Capital - Maxwell 100,000
200,000 200,000
Capital - Betty
Betmax Pty Ltd - shares issued to Betty
100,000 Balance b/d Realisation
80,000
20,000
100,000 100,000
Capital - Maxwell
Betmax Pty Ltd - shares issued to Maxwell
100,000 Balance b/d Realisation
80,000
20,000
100,000 100,000
Chapter 4: Partnerships - Solutions
53
14. G & P
General Journal of G & P
Date Particulars Debit Credit
Realisation 200,000 Assets 200,000 Transfer of balances
Liabilities 40,000 Realisation 40,000 Transfer of balances
Ewing Promotions 150,000 Realisation 150,000 Agreed purchase consideration
Bank 150,000 Ewing Promotions 150,000 Receipt of purchase consideration
Capital G 5,000 Capital P 5,000 Realisation 10,000 Loss on sale transferred
Current G 40,000 Current P 20,000 Capital - G 40,000 Capital - P 20,000 Transfer of balances
Capital G 85,000 Capital P 65,000 Bank 150,000 Settlement to partners of Capital balances.
Prepare Financial Statements - Solutions
54
16. Brahe, Kepler and Jeans Realisation
Inventory 58,600 Bank: Proceeds 222,200
Accounts Receivable 37,200 Accounts Payable - Discounts 3,200
Land & Buildings 138,000 Mortgage ( & Interest ) 77,000
Plant 44,000
Bank - costs 600
Mortgage - Interest 1,000
Capital - Brahe 7,667
Capital - Kepler 7,667
Capital - Jeans 7,666 23,000
302,400 302,400
Bank
Realisation: Proceeds Balance b/d 37,600 Land & Buildings 152,000 Realisation - costs 600 Plant 16,000 Accounts Payable 39,600 Inventory 36,300 Capital - Brahe 67,667 Accounts Receivable 17,900 Capital - Kepler 57,667 Capital - Jeans 19,066
222,200 222,200
( c ) Capital - Brahe
Bank 67,667 Balance b/d 40,000 Current 20,000 Realisation - Profit 7,667
67,667 67,667
Capital - Kepler
Bank 57,667 Balance b/d 40,000 Current 10,000 Realisation - Profit 7,667
57,667 57,667
Capital - Jeans
Current 8,600 Balance b/d 20,000 Bank 19,066 Realisation - Profit 7,666
27,666 27,666