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.
SECURED CREDITORS A secured creditor may: Rely on his security and not prove at all. Surrender his security and prove for the full amount of the debt. Realise his s
it is for what purpose?
Pro-forma accounts under Trustee Act v\:* {behavior:url(#default#VML);} o\:* {behavior:url(#default#VML);} w\:* {behavior:url(#default#VML);} .shape {behavior:url(#def
Juniper Ltd is a listed diversified company. In preparing its financial statements in accordance with AASB 8, the chief operating officer has identified three operating segments:
Pooling of Interest - Used to account for acquisition of another company when acquiring company exchanges its voting COMMON STOCK for voting common stock of the attained company wh
1. From your review of note 3.7, how does the company determine whether a sale has occurred? 2. Using the consolidated income statement and consolidated statement of financial p
what is the different between prorfit and margin prorfi
Flying High Inc. plans to raise $5,000,000 external financing by issuing bonds, and is considering two options: regular bonds & zero couple bonds. The regular bonds will have coup
(a) IFRS 8 Operating segments requires that segmental information be provided by listed entities. Clearly FGH is looking to list and hence IFRS 8 will be applicable. The disclosure
Ordinary Income - One of two classes of income (other being CAPITAL GAINS) taxed under the INTERNAL REVENUE CODE. Factually, ordinary income is taxed at a higher rate than capital
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