Chapter 4 61 Dissolution & Sale of Business
(b) Bank Account
$ $ $
Balance b/f 9 250 Trade payables ($48 735$3060) 45 675
Trade receivables ($53 485 $720) 52 765 Capital a/c B 18 073
Capital a/c A 27 995 C 26 262 44 335
90 010 90 010
(c) Partner’s capital accounts
A ($) B ($) C ($) A ($) B ($) C ($)
Ordinary shares (4/8: 3/8: 1/8) 100 000 75 000 25 000 Balance b/f 75 000 90 000 60 000
Pref. shares (5/15:6/15:4/15) 33 333 40 000 26 667 Current a/c 24 840 44 950 18 555
Debentures (W 1) 32 000 Realisation (profit) 68 998 51 748 17 249
Cash [475 000200 000 Loan 40 000
10000032000]×4/8;3/8;1/8 71 500 53 625 17 875 Bank (Balancing fig) 27 995
Bank (Balancing figure) ______ 18 073 26 262 ______ ______ _____
236 833 186 698 95 804 236 833 186 698 95 804
(d) Statement of Financial Position as at 1 July 2013
Non-Current Assets $ $
Intangible - Goodwill (W 2) 135 655
Tangibles 250 000 385 655
Current Assets
Inventories _89 345
Total assets 475 000
Equity $ $
200 000 ordinary shares of $1 200 000
200 000 8% pref. shares of $0.50 100 000 300 000
Non-Current Liabilities
10% debentures (W 1) 32 000
Bank loan [$475 000 $200 000 $100 000 $32000] 143 000 175 000
475 000
WORKINGS
(W.1) Face value of debentures × 8 % = Interest on Alvin’s loan of partnership
X × 10 % = ($40 000 × 8%)
X = $32 000
(W.2) Calculation of Goodwill $
Purchase consideration of the partnership 475 000
Net worth of partnership purchased [250 000 + 89 345] 339 345
Goodwill 135 655
QUESTION 3 NOVEMBER 2014 P41 Q1 (a to c)
(a) Realisation Account
$ $
Land and buildings 210 000 Bank: Land and buildings 217 000
Plant and machinery 27 950 Bank: Plant and machinery 25 000
Motor vehicles 11 352 Bank: Motor vehicles 5 000
Inventories 17 632 Bank: Inventories 18 478
Trade receivables (W 1) 1 206 A’s capital – Motor vehicle 4 000
Bank - dissolution costs 2 250 B’s capital – Motor vehicle 4 000
Capital a/c A $1 692 Trade payables ($22 840 × 5%) 1 142
B 1 692
C 846 4 230 ______
274 620 274 620
