Prepare the realisation account

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Reference no: EM132719799

Partnership dissolution - ledger accounts

Hale and Shine decided to dissolve their partnership on 30 October 2003, at which date their statement of financial position was as set out below. Profits and losses are shared 5:3.

On 15 November the proceeds from the sale of assets were:

Accounts receivable $ 86 400

Furniture and equipment 21 000

Motor vehicle 10 050

Inventory 127 500

Telstra shares 12 750

Refund of prepaid insurance 450

On the same date, accounts payable (including $800 omitted for sundry expenses) were discharged for $42 600. The bank had charged interest on overdraft to date at final settlement of $305. Realisation expenses of $3400 were paid and the bank account was closed.

Required:

Problem 1: Prepare the Realisation account, the Cash at Bank and partners' Capital accounts after completion of the dissolution.

Reference no: EM132719799

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