Amalgamations-partnership, Financial Accounting


Two sole traders and a partnership,two or more partnerships or a sole trader and other partnerships may combine or join together to forma a single partnership.

The benefit of amalgamation includes:

  • An expansion of the capital base
  • Wider pool of experts


In accounting, for amalgamation, the process involves closing off the books of the individual partnerships or businesses and preparing the opening balance sheet of the newly combined business. The process of closing the books of individual businesses follows the same procedure as that of dissolutions but instead of assets being sold, they are being taken over in the new business.

Therefore a realization account is opened whereby the book values of the assets are debited and newly agreed values are credited. The balance of the realization account represents a profit or loss on amalgamation which is closed off to the capital accounts according to the old profit sharing ratio.

The capital required by each partner in the new business should be balance carried down (c/d) in the partners capital accounts. The balancing figures it the capital accounts will be the cash that will be either paid out or introduced by a partner.

The remaining cash in an individual business will now be transferred to the newly combined business.

Posted Date: 12/11/2012 7:16:06 AM | Location : United States

Related Discussions:- Amalgamations-partnership, Assignment Help, Ask Question on Amalgamations-partnership, Get Answer, Expert's Help, Amalgamations-partnership Discussions

Write discussion on Amalgamations-partnership
Your posts are moderated
Related Questions
Select a publicly traded company for which an Accounting and Auditing Enforcement Release (AAER) was published on the U.S. Securities and Exchange Commission (SEC) website at http

a) A company has 7000 obsolete toys carried in inventory at a manufacturing cost of $6 per unit. If the toys are reworked for $2 per unit, they could be sold for $3 per unit. If th

1) Inventory of raw material are held to make sure that the production process is not disrupted because of shortage of raw material. The amount of raw material inventory would base

The business is considering two proposals for their promotions of the professional courses.Proposal one could give a stable return throughout the period. Proposal Two would give hi

Complete the table and use the information to determine profit maximization or loss minimization. 1. Complete the table Normal 0 false false false EN-I

Consider two individuals with endowments of 60 hours per week of leisure, nonlabour income of $Y per week, and a wage of $7.50.  At this wage assume that workers are constrained by

Q. Off balance sheet financing? A finance charter exists when the substance of the lease is that the lessee enjoys substantially all of the risks and rewards of ownership even

Significant Findings or Issues - Substantive matters which are vital to procedures performed, conclusions reached or evidence obtained and include though aren't limited to: 1.

(a)  In order to obtain free cash flow to equity (FCFE), the two adjustments that Shaar must make to cash flow from operations (CFO) are  i.   CFO does not consider the inves

A parent has had a controlling interest of 60% in its subsidiary for a number of years. Below are financial statement extracts of the two companies for the year ended 30 June 20