Reference no: EM133105750
Question - A partnership was formed by Salmah, Sally, and Selvi in 1999. The partnership provides medical services to underprivileged individuals in Malaysia. Each partner shares the profits or losses on the ratio of 5:3:2, respectively. The following balances were extracted from the partnership books of account as at 30 November 2021.
|
|
RM
|
RM
|
|
Capital account, beginning balance
|
|
|
|
Salmah
|
|
100,000
|
|
Sally
|
|
85,000
|
|
Selvi
|
|
70,000
|
|
Current account, beginning balance
|
|
|
|
Salmah
|
|
70,000
|
|
Sally
|
|
50,000
|
|
Selvi
|
|
47,000
|
|
Building
|
400,000
|
|
|
Motor vehicle
|
180,000
|
|
|
Furniture and fittings
|
100,000
|
|
|
Accumulated depreciation-building
|
|
160,000
|
|
Accumulated depreciation-motor vehicle
|
|
120,000
|
|
Accumulated depreciation-furniture and fittings
|
|
80,000
|
|
Supplies
|
72,500
|
|
|
Accounts receivable (net)
|
35,000
|
|
|
Cash and bank
|
80,000
|
|
|
Accounts payable
|
|
8,000
|
|
Net profit for the year
|
|
77,500
|
|
|
867,500
|
867,500
|
Additional information:
1. The salary for Sally is RM1,000 per month.
2. The partners are entitled to a 10% interest per annum on capital account balances.
3. Selvi withdrew RM1,000 cash in the partnership.
4. Sally resigned and retired from the partnership on 1 June 2021. Upon her retirement, the building and motor vehicle were revalued at RM30,000 and RM4,000 above their carrying amounts, respectively.
5. Due to her retirement, Sally's current account is to be transferred to her capital account. The partnership agreed to pay the amount due to Sally, except for RM40,000, which remains as a loan to the partnership.
6. Goodwill was valued at three years' purchase of the average profit for the last four years. The profit for the previous four years was as follows:
|
RM
|
|
30 November 2020
|
62,000
|
|
30 November 2019
|
68,000
|
|
30 November 2018
|
58,000
|
|
30 November 2017
|
50,000
|
Following Sally's retirement, Salmah and Selvi decided to continue with the same partnership with two member-partners. While Salmah agreed to pay RM100,000 into the partnership as an additional capital contribution, Selvi consented to invest an additional RM50,000. Each of them decided to pay for the goodwill based on the new profit-sharing ratio. The entry was not recorded in books upon the formation of the new partnership.
The new partnership profit-sharing ratio is 2:1.
The net profit for the year is deemed to have been earned evenly throughout the year.
Required -
1. Compute the goodwill for the partnership and prepare the goodwill account.
2. Prepare the partner's capital and current account as of 1 June 2021 in a columnar form.
3. If Salmah and Selvi dissolve the partnership, explain in what order the partnership net assets must be distributed.
|
Determine the amount of sales
: Determine the amount of sales (units) that would be necessary under the proposed program to realize the $57,100,000 of operating income
|
|
How much additional external funding does the firm require
: Assume that revenue growth is 5%, depreciation is 10% of fixed assets, How much additional external funding does the firm require in 2015
|
|
Prepare the non-current assets note
: Motor vehicles are depreciated at 20% per annum using the reducing balance method. Prepare the non-current assets note
|
|
How much is Es share in the partnership profit
: As of December 31, 2015, D, E and F has adjusted capital balances of P100,000, P250,000 and P150,000, How much is Es share in the partnership profit
|
|
Compute the goodwill for the partnership
: The partnership agreed to pay the amount due to Sally, except for RM40,000, which remains as a loan to the partnership. Compute the goodwill for the partnership
|
|
Proliferation and duration of the conflict
: In our video lecture this week, I provide you with information on one of the Wars of Religion, and suggest that, perhaps, despite its title as a "War of Religio
|
|
Awareness of and response to homelessness
: Do aspects of youth homelessness differ in communities with a strong awareness of and response to homelessness?
|
|
Important preconditions for the call for reform
: Based on the material we've covered in weeks 1-3, what were the most important preconditions for the call for reform, and why? Overall, would you say that long-
|
|
What is the projected benefit obligation on December
: On December 31, 2021, the employee had worked for Gerard Company for 10 years. What is the projected benefit obligation on December 31, 2021
|