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

Analysis of potential arrangement with supplier, At current the working cap...

At current the working capital cycle is Receivables days $0.4m/$10m * 365 = 15 days Inventory days $0.7m/$8m * 365 = 32 days (cost of sales = $10m - $2m) Payables days $1.

expected range of returns, Series Arithmetic Mean Standa...

Series Arithmetic Mean Standard Deviation   Small-company stocks 15.9  % 32.8  %   Large-company

The trustee in bankruptcy, THE TRUSTEE IN BANKRUPTCY 1) Appointment o...

THE TRUSTEE IN BANKRUPTCY 1) Appointment of trustee The trustee is appointed: By the creditors by ordinary resolution, or By the committee of inspection, if so

Khyber bank, how we write a literature review

how we write a literature review

Estimate a linear joint demand curve, Pinapple Inc. is deciding how to pric...

Pinapple Inc. is deciding how to price its two lines of laptops, one of which is a light one for travel (which is called Light) and the other is a powerful one (called Power). Thes

The fair-value method of accounting for nci., In the current year, Company ...

In the current year, Company A is formed with $630,000 in capital from the sale of 21,000 shares of stock at $30 a share. Company A, which has no other operations, immediately acqu

Assume that you are the president of gaslight company., Assume that you are...

Assume that you are the president of Gaslight company. At the end of the year (December 31, 2011 of operation.

Explain zero base budget, Q. Explain Zero Base Budget? Zero base budget...

Q. Explain Zero Base Budget? Zero base budgeting can be defined as - 1) An operating planning and budgeting process which requires each manager to justify his entire budget

Leslie, My trial balance is off by $304 and I can''t find my error

My trial balance is off by $304 and I can''t find my error

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