Reference no: EM132568332

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:

1. 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.

2. 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.

3. Deris took over the inventories at a discount of 10%.

4. 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.

5. The amounts owing to the creditors were paid in full at a discount of RM2,000.

6. Dissolution expenses amounting to RM1,500 were fully paid.

7. All payments and receipts were made through the bank account.

8. 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:

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

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

Question (c) Prepare the partners' capital account to close the books of the partnership.