Ali, Ben and Cathy have been in partnership for many years sharing profits and losses based on the ratio 22:1. They provided the following information. Statement of Financial Position As At 30 September 2021 Non-current assets Land and buildings Plant and machinery Motor vehicles 210,000 27,950 11,352 249,302 Current assets Inventory Trade receivables 17.832 9,340 2,548 Bank 29,518 278,820 Total assets Current liabilities Trade payables 22,840 Non-current liabilities Loan from Ali 75,000 (97.840) 180, 980 Capital accounts Ali 80,000 Ben 60,000 20,000 Cathy 180,000 12,735 10,873 (2,628) Current accounts Ali Ben Cathy 20.080 180,980 On 30 September 2021, they decided to dissolve the partnership. The terms of the dissolution were: (1) (2) (3) Land and buildings were sold for £217,000. Plant and machinery was sold for £25,000. Motor vehicles were disposed of as follows: one to Ali and one to Ben at an agreed value of £4,000 each, with the remaining motor vehicles being sold for £5,000. The inventory was sold for £18,478. Two customers who owed the partnership £500 and £450 were unable to settle their debts. The remaining credit customers paid in full after receiving a 2% discount. All of the trade payables were paid after they allowed a 5% discount The total costs of dissolution amounted to £2.250. (4) 5) (6) 7)
Ali, Ben and Cathy have been in partnership for many years sharing profits and losses based on the ratio 22:1. They provided the following information. Statement of Financial Position As At 30 September 2021 Non-current assets Land and buildings Plant and machinery Motor vehicles 210,000 27,950 11,352 249,302 Current assets Inventory Trade receivables 17.832 9,340 2,548 Bank 29,518 278,820 Total assets Current liabilities Trade payables 22,840 Non-current liabilities Loan from Ali 75,000 (97.840) 180, 980 Capital accounts Ali 80,000 Ben 60,000 20,000 Cathy 180,000 12,735 10,873 (2,628) Current accounts Ali Ben Cathy 20.080 180,980 On 30 September 2021, they decided to dissolve the partnership. The terms of the dissolution were: (1) (2) (3) Land and buildings were sold for £217,000. Plant and machinery was sold for £25,000. Motor vehicles were disposed of as follows: one to Ali and one to Ben at an agreed value of £4,000 each, with the remaining motor vehicles being sold for £5,000. The inventory was sold for £18,478. Two customers who owed the partnership £500 and £450 were unable to settle their debts. The remaining credit customers paid in full after receiving a 2% discount. All of the trade payables were paid after they allowed a 5% discount The total costs of dissolution amounted to £2.250. (4) 5) (6) 7)
Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations
Section: Chapter Questions
Problem 41P
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Prepare Dissolution (Realisation) account.
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