Illustration of retirement of a partner, Financial Accounting

Illustration of Retirement of a partner

A, B and C have been trading as equal partners having capital contributions of £500,000 and £400,000 and £300,000 respectively as at 1st January 2005.  On the same date, B Deared to leave the partnership and A and C were to continue trading as partners sharing profits in the ratio of 2:1.  The total amounts due to B could not be paid immediately and thus the remaining partners agreed with B that they will pay 25% of the total due in cash and the balance will be left as a loan earning interest at a rate of 8% per annum. 

Meanwhile, goodwill has agreed at £180,000 and B had a credit balance on his current account of £40,000.  Goodwill was not to be retained in the books.

Required:

Prepare partners capital accounts record the retirement of B

Capital account

 

A

B

C

 

A

B

C

Goodwill written off

120,000

-

60,000

Bal. b/d

500,000

400,000

300,00

Cash book

-

125,000

-

Goodwill

60,000

60,000

60,000

8% loan a/c

 

375,000

 

Current a/c

 

40,000

 

Bal c/d

440,000

           -

300,000

 

______

______

______

 

560,000

500,000

360,000

 

560,000

500,000

360,000

Posted Date: 12/11/2012 6:21:40 AM | Location : United States







Related Discussions:- Illustration of retirement of a partner, Assignment Help, Ask Question on Illustration of retirement of a partner, Get Answer, Expert's Help, Illustration of retirement of a partner Discussions

Write discussion on Illustration of retirement of a partner
Your posts are moderated
Related Questions
This lab assignment will correspond to developing a cash flow budget with an operating loan. There is on lab exercise listed below. Additionally, there are two assignment questions

Q. Calculation of the change in finance costs? Past ACCA examiners have occupied inconsistent approaches regarding the calculation of the change in finance costs due to settlem

Debra Motors's 14% coupon rate, semiannual payment, $1,000 par value bonds that mature in 20 years are callable 3 years from now at a price of $1,075. The bonds sell at a price of

What Accounting method (cash or accrual) would you recommend for the following businesses? a. A gift shop with average annual gross receipts of $900,000 b. an accounting partnershi

The following are the three-month HIBOR and three-year EFN futures prices for September 2010 contracts.   a Determine the HIBOR in three-months for settling the futures

premium coupons that already have been expired should be or shouldn''t be estimated as liability?

State the term - Regulations Financial accounting reports, for numerous businesses, are subject to accounting regulations which try to make sure they are produced with standard

THE PETITION Petition by debtor : If the debtor presents his own petition, a receiving order is made at once without a court hearing and an adjudication order may also be ma

Cumulative and substitutional legacies and devises Where a will makes two gifts of unequal amounts to the same person, they are assumed, in the absence of a contrary indication

As a borrower, which of the following two 30 year, monthly payment loans would you choose (and why) if you had a 10 year expected payment horizon: 5% interest rate with 3.5 points,