Bedin, Ceyla and Deris have been in a partnership for a number of years, sharing profits in the ratio of 5:3:2, respectively. The statement of financial position of the business as at 31 December 2013 is as follows: Statement of Financial Position As at 31 December 2013 RM RM ASSETS Non-Current Assets Premises 80,000 Equipment 50,000 Vehicles 30,000 160,000 Current Assets Inventories 40,000 Debtors 50,000 Bank 112,000 202,000 TOTAL ASSETS 362,000 LIABILITIES & OWNERS EQUITY Non-Current Liabilities Loan from Bedin 8,000 Loan from Finance Company 20,000 28,000 Current Liabilities Creditors 42,000 Bank Overdraft 32,000 74,000 Owners Equity Capital Accounts Bedin 160,000 Ceyla 60,000 Deris 20,000 240,000 Current Accounts Bedin 10,000 Ceyla 4,000 Deris 6,000 20,000 TOTAL LIABILITIES & OWNERS EQUITY 362,000 On 1 January 2014, the partnership was dissolved due to a disagreement between the partners. Upon dissolution, the following transactions took place: Premises were sold for RM115,000. The proceeds were then used to settle the bank overdraft. Equipment was realised at a loss of RM10,000. Bedin agreed to take over the vehicles at 20% below book value. The loan from Bedin to the partnership was used as part of the settlement for the vehicles and the balance was paid by cheque. Deris took over the inventories at a discount of 10%. All debtors paid their debts in full except for an amount of RM1,500 which was unrecoverable and was therefore written off as bad debt. The amounts owing to the creditors were paid in full at a discount of RM2,000. Dissolution expenses amounting to RM1,500 were fully paid. All payments and receipts were made through the bank account. Deris had a debit balance in his capital account but only managed to pay RM4,400 to the partnership business. The deficiency is to be borne between Bedin and Ceyla based on the Garner vs. Murray rule. REQUIRED: (a) Prepare the realisation account to close the books of the partnership. (b) Prepare the bank account to close the books of the partnership.

Bedin, Ceyla and Deris have been in a partnership for a number of years, sharing profits in the ratio of 5:3:2, respectively. The statement of financial position of the business as at 31 December 2013 is as follows: Statement of Financial Position As at 31 December 2013 RM RM ASSETS Non-Current Assets Premises 80,000 Equipment 50,000 Vehicles 30,000 160,000 Current Assets Inventories 40,000 Debtors 50,000 Bank 112,000 202,000 TOTAL ASSETS 362,000 LIABILITIES & OWNERS EQUITY Non-Current Liabilities Loan from Bedin 8,000 Loan from Finance Company 20,000 28,000 Current Liabilities Creditors 42,000 Bank Overdraft 32,000 74,000 Owners Equity Capital Accounts Bedin 160,000 Ceyla 60,000 Deris 20,000 240,000 Current Accounts Bedin 10,000 Ceyla 4,000 Deris 6,000 20,000 TOTAL LIABILITIES & OWNERS EQUITY 362,000 On 1 January 2014, the partnership was dissolved due to a disagreement between the partners. Upon dissolution, the following transactions took place: Premises were sold for RM115,000. The proceeds were then used to settle the bank overdraft. Equipment was realised at a loss of RM10,000. Bedin agreed to take over the vehicles at 20% below book value. The loan from Bedin to the partnership was used as part of the settlement for the vehicles and the balance was paid by cheque. Deris took over the inventories at a discount of 10%. All debtors paid their debts in full except for an amount of RM1,500 which was unrecoverable and was therefore written off as bad debt. The amounts owing to the creditors were paid in full at a discount of RM2,000. Dissolution expenses amounting to RM1,500 were fully paid. All payments and receipts were made through the bank account. Deris had a debit balance in his capital account but only managed to pay RM4,400 to the partnership business. The deficiency is to be borne between Bedin and Ceyla based on the Garner vs. Murray rule. REQUIRED: (a) Prepare the realisation account to close the books of the partnership. (b) Prepare the bank account to close the books of the partnership.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter6: Accounting Periods And Other Taxes

Section: Chapter Questions

Problem 5MCQ: Which of the following entities is required to report on the accrual basis? An accounting firm...

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Statement of Financial Position

As at 31 December 2013

	RM	RM
ASSETS
Non-Current Assets
Premises	80,000
Equipment	50,000
Vehicles	30,000	160,000
Current Assets
Inventories	40,000
Debtors	50,000
Bank	112,000	202,000
TOTAL ASSETS		362,000

LIABILITIES & OWNERS EQUITY
Non-Current Liabilities
Loan from Bedin	8,000
Loan from Finance Company	20,000	28,000
Current Liabilities
Creditors	42,000
Bank Overdraft	32,000	74,000
Owners Equity
Capital Accounts
Bedin	160,000
Ceyla	60,000
Deris	20,000	240,000
Current Accounts
Bedin	10,000
Ceyla	4,000
Deris	6,000	20,000
TOTAL LIABILITIES & OWNERS EQUITY		362,000

On 1 January 2014, the partnership was dissolved due to a disagreement between the partners. Upon dissolution, the following transactions took place:

Premises were sold for RM115,000. The proceeds were then used to settle the bank overdraft. Equipment was realised at a loss of RM10,000.
Bedin agreed to take over the vehicles at 20% below book value. The loan from Bedin to the partnership was used as part of the settlement for the vehicles and the balance was paid by cheque.
Deris took over the inventories at a discount of 10%.
All debtors paid their debts in full except for an amount of RM1,500 which was unrecoverable and was therefore written off as bad debt.
The amounts owing to the creditors were paid in full at a discount of RM2,000.
Dissolution expenses amounting to RM1,500 were fully paid.
All payments and receipts were made through the bank account.
Deris had a debit balance in his capital account but only managed to pay RM4,400 to the partnership business. The deficiency is to be borne between Bedin and Ceyla based on the Garner vs. Murray rule.

REQUIRED:

(a) Prepare the realisation account to close the books of the partnership.

(b) Prepare the bank account to close the books of the partnership.

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