Illustration of retirement of a partner, Financial Accounting

Assignment Help:

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


Related Discussions:- Illustration of retirement of a partner

Market segmentation analysis, Task This task is designed to further dev...

Task This task is designed to further develop your critical analysis and research skills related to the tourism or hospitality enterprise you selected for Assignment 1. You are

Cashflows from operating activities-group activities, Cashflows from operat...

Cashflows from operating activities  operating activities are the principle revenue generating activities of the business and examples of such cashflows include: Cash re

Activity cost drivers, Activity Cost Drivers An element of measurement...

Activity Cost Drivers An element of measurement for the stage (or quantity) of an activity that is performed within a business company.  Hence, a movement cost driver represen

Amortization of patents for year 2010, Ely purchased a patent (with a remai...

Ely purchased a patent (with a remaining legal life of ten years) from Backo on January 1, 2010 for $300,000. Ely expected to use the patent for five years. The carrying value on B

How much of the existing cash balance, As of January 1, 2011, the partnersh...

As of January 1, 2011, the partnership of Canton, Yulls, and Garr had the following account balances and percentages for the sharing of profits and losses: Cash 80,000 non cash

Acquisition Project , Do you have anyone on staff that understands acquisit...

Do you have anyone on staff that understands acquisition accounting procedures?

Company accounts introduction, practical problems of chapter one of company...

practical problems of chapter one of company accounts

What is goodwill, Find the heading Goodwill. What type of an asset is goodw...

Find the heading Goodwill. What type of an asset is goodwill? Does Amazon write off this asset? Explain what the company does

Prepare a statement to show the total production overheads, Aristo Ltd uses...

Aristo Ltd uses a system of absorption costing. The product passes through a machining department and an assembly department before it is completed. The assembly department is labo

Consolidating Accounting, I have an assignment in consolidation accounting ...

I have an assignment in consolidation accounting and would like to know if you can assist me in doing the assignment for me. I am doing BA in Accounting . Please let me know. Re

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd