Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Illustrations of Dissolutions
X, Y and Z have been trading as partners sharing profits and losses in the ratio of 2:2:1 on the 1st July 2005, they decided to dissolve the partnership and all the assets were sold in a single transaction in the market. The balance sheet as at 1s July 2005 was as follows:
X, Y and Z
Balance Sheet as at 1.7.2005
£
Freehold property
60,000
Equipment
30,000
90,000
CURRENT ASSETS
Inventory
16,000
Account receivables
9,000
Cash at bank
4,200
29,200
Account payables
(6,000)
Net current assets
23,200
NET ASSETS
113,200
FIANCNED BY:
Capital accounts X
78,000
Y
26,000
Z
4,000
108,000
Current accounts X
1,400
(600)
400
1,200
109,200
Loan from bank
3,000
Loan from Y
1,000
The current assets sold on the market fetched the following assets:
62,000
9,600
5,800
The receivables paid their amounts in full while payables gave discounts of £200. The dissolution amounts to £1600.
Required:
Prepare the relevant accounts to record the dissolution.
Solution
Realization account
Cash book equipment
Property
6,200
8,800
Debtors
Cash book dissolution expenditure
1,600
A/c payables discounts
200
Loss on dissolution X
12,000
______
6,000
116,600
Cash book account
Balance b/d
Realizable dissolution expense
Realisation – equipment
Accounts payables
7,000
Accounts receivables
Capital X
67,400
Capital account Z
13,400
92,200
Capital account
X
Realisation account – loss
Bal b/d
Current account
-
600
Cash book (bal. Fig)
_____
Cash book (Bal. Fig)
79,400
In the current example, we have assumed that partner Z is solvent and therefore he is in a position to bring in the cash required from him so that full distribution is made to the other partners.However, in certain situations, a partner/some partners may not be able contribute the additional cash required and thus they are said to be insolvent.
On December 15, 2011 Risby Sales Co. sold a track of land that cost $3,600,000 for $4,500,000. Rigsby appropriately uses the installment sale method of accounting for this transact
Statement of surplus capital v\:* {behavior:url(#default#VML);} o\:* {behavior:url(#default#VML);} w\:* {behavior:url(#default#VML);} .shape {behavior:url(#default#VML
The management of Gimenez Corporation is investigating an investment in equipment that would have a useful life of 7 years. The company uses a discount rate of 17% in its capital b
Interest revenue: At the end of 2012, a manufacturer sells machinery to a customer for $90,000. $30,000 is paid immediately, and the customer signs a promissory note for the r
The income elasticity of money demand is 2/3. Real income is expected to grow by 4.5% over the next year, and the real interest rate is expected to remain constant over the next ye
how can make a balance sheet
A of Surat consign goods to B of Jaipur to be sold at or above invoice price. B is entiled to get a commission of 8% on sales at invoice price plus 25% of any surplus price reali
HOW TO CALCULATE SINKING FUND METHOD
The market value of a bond is equal to: The present value of all future cash payments provided by a bond The present value of all future interest payments provided by a bond The pr
What are the sailent features of branches
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd