Prepare statement showing how cash distribution should made

Reference no: EM131698623

PARTNERSHIP ACCOUNTS QUESTIONS

Q1. Explain the various methods of treatment of good will on admission of a partner.

Q2. D retired from a firm on March 31, 2001. The amount due to him was Rs. 40,400. The terms of retirement provided for payment of Rs. 10,400 immediately and there after the debt was to be extinguished in three years by payment of Rs. 10,000 together with interest @ 10% on the outstanding balance. Show that Loan Account.

Q3. The Balance Sheet of a firm on 31^st March 2006 was as follows:

Liabilities	Rs.	Assets	Rs.
X : capital	5,000	Furniture	8,000
Y : capital	4,000	Stock	2,000
Z : capital	3,000	Debtors	1,000
Sundry creditors	2,000	Cash at Bank	3,000
	14,000		14,000

The partnership was dissolved as on the above date. The sundry creditors were paid at a discount of 5%. X agreed to take over the furniture at Rs. 9,000; Y the stock at Rs. 1,500 and Z the debtors at Rs. 600/-the expenses of realisation came to Rs. 110. Close the books of the firm.

Q4. The position of A, B and C on 31^st March 2006 was as follows :

Liabilities	Rs.	Assets	Rs.
Sundry Creditors	6,300	Cash	2,500
Profit and Loss A/c	7,000	Sundry Assets	17,000
A : Loan	4,000	C : Capital a/c	7,800
B : Capital	6,400
B : Capital	3,600
	27,300		27,300

Profit and losses are shared - A 18/35, B 7/35 and C 10/35. The firm is dissolved on the above date. Sundry Assets realise Rs. 14,000. Sundry Creditors are paid Rs. 6,000 in full settlement. Realisation expenses amount to Rs. 800. C is insolvent.

Assume capitals are not fixed, close the books of the firm under Garner Vs Murray decision.

Q5. X, Y and Z are partner sharing profits and losses in the ratio of 5:3:2 respectively. The following in their Balance Sheet on 31^st March 2006 on which date they dissolve partnership.

Liabilities	Rs.	Assets	Rs.
Creditors	40,000	Buildings	40,000
X : Loan	10,000	Machinery	30,000
Capital Accounts:		Furniture	13,700
X 50,000		Stock	40,800
Y 15,000	1,10,000	Debtors	35,500
Z 45,000	1,60,000		1,60,000

It was agreed to repay the amounts due to partners as and when the assets were realised viz :

	Rs.
May 1 2006	30,000
July 1 2006	73,000
September 1 2006	47,000

Prepare a statement showing how the cash distribution should be made under Maximum Loss Method.

Reference no: EM131698623

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