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.
Calculating Present Value [LO1] An investment will pay you $43,000 in 10 years. If the appropriate discount rate is 7 percent compounded daily, what is the present value?
#questionBroadway Scripts is a service-type enterprise in the entertainment field, and its manager, Joe Numbers, has only a limited knowledge of accounting. Joe prepared the follo
Q. The capital investment appraisal techniques such as NPV, IRR, ARR, PV and Time value of money have become irrelevant post Celtic Tiger. Due to the depth of the recession comp
Write the advantages and drawbacks of both the structured and object-oriented (OO) paradigm in programming. Describe the perceived preference of OO languages over the more structu
Problem 1 (28 marks) Pre-Contribution Balance Sheets and Fair Values June 30, 20X9 (in thousands of $) Swag Co. Perk Ltd. Pre- Contribution Fair Value Pre- Contributi
CONSOLIDATED BALANCE SHEET The consolidated balance sheet involves adding assets and liabilities of the subsidiary to those of the holding company while excluding inter-company
In February, one of Team Shirts' best customers went bankrupt owing team shirts $85. Team shirts uses the sales method for estimating bad debts. February sales were $15,000. The ac
Accounting objectives Accounting has two main objectives: To assist control over the assets and liabilities, and the income and expenditure of the enterprise; and To
Illustration of consolidated balance sheet H Ltd owned S Ltd since the date of incorporation of S Ltd. The balance sheets of the two companies as at 31 December 20X2 is as fo
Do we recognise revenue if it will be assigned to other party ?
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd