Illustration of retirement of a partner, Financial Accounting

Assignment Help:

Illustration of Retirement of a partner

A, B and C have been trading as equal partners having capital contributions of £500,000 and £400,000 and £300,000 respectively as at 1st January 2005.  On the same date, B Deared to leave the partnership and A and C were to continue trading as partners sharing profits in the ratio of 2:1.  The total amounts due to B could not be paid immediately and thus the remaining partners agreed with B that they will pay 25% of the total due in cash and the balance will be left as a loan earning interest at a rate of 8% per annum. 

Meanwhile, goodwill has agreed at £180,000 and B had a credit balance on his current account of £40,000.  Goodwill was not to be retained in the books.

Required:

Prepare partners capital accounts record the retirement of B

Capital account

 

A

B

C

 

A

B

C

Goodwill written off

120,000

-

60,000

Bal. b/d

500,000

400,000

300,00

Cash book

-

125,000

-

Goodwill

60,000

60,000

60,000

8% loan a/c

 

375,000

 

Current a/c

 

40,000

 

Bal c/d

440,000

           -

300,000

 

______

______

______

 

560,000

500,000

360,000

 

560,000

500,000

360,000


Related Discussions:- Illustration of retirement of a partner

determine the hibor , The following are the three-month HIBOR and three-ye...

The following are the three-month HIBOR and three-year EFN futures prices for September 2010 contracts.   a Determine the HIBOR in three-months for settling the futures

What is the annual dividend on the preferred stock, Q. Somento Forest Inc. ...

Q. Somento Forest Inc. has 10,000 shares of 6%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2014. What is

Lease accounting, The following facts pertain to a noncancelable lease agre...

The following facts pertain to a noncancelable lease agreement between Lennox Leasing Company and Gill Company, a lessee. Inception date: May 1, 2012 Annual lease payment due at th

Describe passive income, Q. Describe Passive Income? Passive Income - I...

Q. Describe Passive Income? Passive Income - Includes income derived from such sources like dividends, royalties, interest, rents, amounts received from personal service contra

Describe about backdating, Q. Describe about Backdating? i) Exercise pr...

Q. Describe about Backdating? i) Exercise price is based on a lower share price prior to option grant date. Practice of marking a document with a date that precedes actual date

Evaluate break-even production units, Q. Evaluate Break-Even Production uni...

Q. Evaluate Break-Even Production units? R.S. Manufacturing Ltd. Budgets production of 3,00,000 units at cost of Rs.10 each. The Fixed costs are Rs.20, 00,000. The selling pric

Fraudulent preferences-fraudulent conveyances, Fraudulent preferences ...

Fraudulent preferences The trustee can set aside any transaction effected within the six months preceding the presentation of the petition in circumstances such as to make it

Receiver appointed by court-bankruptcy and liquidation, Receiver appointed ...

Receiver appointed by court If appointed by the court, the receiver must give security as directed by the court. The following notification must be given: (a) The debenture h

Conversion of members'' to creditors'' winding up-liquidation, Conversion o...

Conversion of members' to creditors' winding up If the liquidator in a members' winding up forms the opinion that the company will not be able to pay its debts in full within t

What are the potential benefits of implementing abc, Question 1: (a) De...

Question 1: (a) Define program evaluation. (b) Discuss the four types of program evaluation that are usually carried in the Public Sector. Question 2 (a) You have

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd