Lalitha, Jothi and Kanaga were partners of a firm sharing profit and losses in the ratio of 3:2:3. Setout below was their balance sheet as onMarch 31, 2021.Liabilities & EquityBills PayableSundry CreditorsOutstanding ExpensesCapital:ROAssetsRO80000 Cash in Hand156250 Cash at Bank1250 DebtorsO Stock1875511250222500278750Lalitha500000 Furniture43750Jothi312500 Plant and Machinery121875Kanaga375000 Building300000Profits & Loss A/c5500014800001480000Lalitha retired from the partnership on April 01, 2021 under the following terms:The assets are to be valued as under:Stock250000Furniture37500Plant & MachineryBuilding112500250000A provision for doubtful debt to be created at10625Goodwill of the firm was to be valued at75000The gaining ratio is 2:3.Lalitha was to be paid off immediately.Record the necessary journal entries, prepare Revaluation Account, Capital Accounts and BalanceSheet of the reconstituted partnership.

Revolution Account -: Revaluation account is a type of nominal account, which is formulated for the…

Answered: Lalitha, Jothi and Kanaga were partners…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter2: Basic Accounting Systems: Cash Basis

Section: Chapter Questions

Problem 10CDQ: Assume that as of January 1, 20Y8, Sylvester Con- suiting has total assets of $500,000 and total...

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The information given below was extracted from the accounting records of Veco Traders, a partnershipbusiness with Bobby and Vincent.Required:Prepare the Statement of Changes in Equity as at: 28 February 2021.INFORMATIONBalances in the ledger 28 February 2019Debit CreditCapital: Bobby 500 000Capital: Vincent 300 000Current account: Bobby (1 Mar 2020) 20 000Current account: Vincent (1 Mar 2020) 15 000Drawings: Bobby 250 000Drawings: Vincent 200 000Additional information1.The net profit according to the Profit and Loss account amounted to R500 000 on 28February 2021.2.The partnership agreement made provision for the following:1.Interest on capital must be provided at 15% per annum on the balances in the capitalAccounts from 1 March 2020 to 31 August 2020. With effect from 1 September 2019 theinterest rate on capital increases to 18% per annum.2.The partners are entitled to the following monthly salaries: Bobby R11 000Vincent R10 0003.Bobby is entitled to a bonus of 15% of the net profit…
Tim and Ray are partners in Double Good Trading. They share the profits and losses equally. The balances extracted from their books as at 31 December 2020 are shown below: $ $ Capital Accounts: Tim 60000 Ray 60000 Current Accounts: Tim 3000 Ray 5000 Drawings: Tim 10000 Ray 10000 Closing inventory 26000 Motor vehicles 80500 Cash 3250 Bank 7460 Trade Debtors 25860 Trade Creditors 28220 Profit & Loss Account for 2020 16850 168070 168070 Additional information: i. After the Profit and Loss Account was prepared, Tim realised that there was an accrued utilities charge amounting to $1,200 that was not recorded. ii. The interest on capital is at 6% per annum. iii. The interest on drawings is at 8% per annum. iv. Tim is to be paid a salary of $24,000 per annum Required: Prepare the Profit and Loss Appropriation Account for the year ended 31 December 2020, and the…
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Chan, Tan and Eric were in partnership sharing profits and losses in the ratio Chan 2/3, Tan 1/4 and Eric 1/12. Their summarized Balance Sheet as at 31 October 2019 was as follows: $$$ $ $ $ $$$ Fixed Assets (at Book Value) Premises 120 000 Machinery 60 000 Motor Vehicle 9 000 189 000 Current Assets Stock 14 200 Debtors 18 000 less Provision for Doubtful Debts 360 17 640 Bank 16 160 48 000 237 000 Capital Accounts Chan…
Chan, Tan and Eric were in partnership sharing profits and losses in the ratio Chan 2/3, Tan 1/4 and Eric 1/12. Their summarized Balance Sheet as at 31 October 2019 was as follows:                                                                         $$$                  $ $ $               $$$ Fixed Assets (at Book Value) Premises                                                                                  120 000 Machinery                                                                               60 000 Motor Vehicle                                                                         9 000               189 000 Current Assets Stock                                                                           14 200 Debtors                                               18 000 less Provision for Doubtful Debts      360                 17 640 Bank                                                                            16 160             48 000 237 000 Capital Accounts Chan…
Chan, Tan and Eric were in partnership sharing profits and losses in the ratio Chan 2/3, Tan 1/4 and Eric 1/12. Their summarized Balance Sheet as at 31 October 2019 was as follows:                                                                         $$$                  $ $ $               $$$ Fixed Assets (at Book Value) Premises                                                                                  120 000 Machinery                                                                               60 000 Motor Vehicle                                                                         9 000               189 000 Current Assets Stock                                                                           14 200 Debtors                                               18 000 less Provision for Doubtful Debts      360                 17 640 Bank                                                                            16 160             48 000 237 000 Capital Accounts Chan…
Chan, Tan and Eric were in partnership sharing profits and losses in the ratio Chan 2/3, Tan 1/4 and Eric 1/12. Their summarized Balance Sheet as at 31 October 2019 was as follows:                                                                         $$$                  $ $ $               $$$ Fixed Assets (at Book Value) Premises                                                                                  120 000 Machinery                                                                               60 000 Motor Vehicle                                                                         9 000               189 000 Current Assets Stock                                                                           14 200 Debtors                                               18 000 less Provision for Doubtful Debts      360                 17 640 Bank                                                                            16 160             48 000 237 000 Capital Accounts…

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