Prince and Quinton are partners and share profits four-sevenths and three- sevenths, respectively. At 1 May 2015, they agree to take Sarah into the partnership and at that date, the balance sheet of the enterprise is as follows: Prince and Quinton Balance Sheet as at 1 May 2015 Assets Land and Buildings Plant and Machinery Furniture Inventory Debtors Cash Liabilities Capital Accounts Creditors . ● . Required: ● Fol P Q R 19 200 14 400 The following agreement was made and carried out: Sarah is to pay R11 200 for her share of goodwill, this sum is to be immediately withdrawn by Prince and Quinton. Sarah is to bring in R8 000 as her capital. Land and buildings, plant and machinery, and furniture to be reduced by 20%, inventory to be revalued at R 17 400 and provision of 5% to be made for doubtful debts. R 6 200 8 600 1 800 11 600 Show all journal entries. Prepare the Revaluation account. 13 200 1 200 42 600 33 600 9 000 42 600 The proportions of the new partnership to be Prince four-ninths, Q three-ninths, S two-ninths; any excess of capital of Prince and Quinton to be transferred to loan accounts to be opened in their names.

Prince and Quinton are partners and share profits four-sevenths and three- sevenths, respectively. At 1 May 2015, they agree to take Sarah into the partnership and at that date, the balance sheet of the enterprise is as follows: Prince and Quinton Balance Sheet as at 1 May 2015 Assets Land and Buildings Plant and Machinery Furniture Inventory Debtors Cash Liabilities Capital Accounts Creditors . ● . Required: ● Fol P Q R 19 200 14 400 The following agreement was made and carried out: Sarah is to pay R11 200 for her share of goodwill, this sum is to be immediately withdrawn by Prince and Quinton. Sarah is to bring in R8 000 as her capital. Land and buildings, plant and machinery, and furniture to be reduced by 20%, inventory to be revalued at R 17 400 and provision of 5% to be made for doubtful debts. R 6 200 8 600 1 800 11 600 Show all journal entries. Prepare the Revaluation account. 13 200 1 200 42 600 33 600 9 000 42 600 The proportions of the new partnership to be Prince four-ninths, Q three-ninths, S two-ninths; any excess of capital of Prince and Quinton to be transferred to loan accounts to be opened in their names.

Accounting

27th Edition

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 12.4BPR

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