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.
how to treat salary compensation given to an employee how to show this in company account
DIVIDENDS The dividends that appear in the consolidated statement of change in equity are for the holding company only. This is because the dividends of the subsidiary belong to
a) Company X is expected to maintain a constant 7% growth rate in their dividends, indefinitely. If the company has a dividend yield of 4%, what is the required return on their sha
Principles, concepts and CONVETIONS
Q. Explain about Tax Ramifications? i) Exercise price effects capital gains of individual and effects compensation expense used by corporation for calculating company's compens
As an expense and an asset This approach tries to resolve the differences between the two methods by ensuring that we show an asset that may materialize or crystallize and at t
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
Horton Co. was organized on January 2, 2010, with 500,000 authorized shares of $10 par value common stock. During 2010, Horton had the following capital transactions: January 5-iss
Effect of Resolution The consequences of the resolution to wind up are: 1) The company must cease to carry on its business except so far as is necessary for the beneficial win
An annuity is explained as stream of uniform duration cash flows. The payment of life insurance premium through the policyholder to the insurance company is an illustration of an a
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