Answer to Question #309194 in Accounting for Ben

Question

A, B and C are in a partnership sharing profit ratio is 5:3:2. The statement of financial position of the partnership 1 january is as follow: ASESETS Property 190 000 Plant and Equipment 85 000 Current assets 15 000 CAPITAL Capital A 40 000 Capital B 120 000 Capital C 80 000 Current account A 5 000 Current account B (10 000) Current account C 20 000 Replacement reserve 20 000 General reserve 15 000. On 1 january 2019 C decided to retire under the following conditions. 1. The propery has to be re-valued up to 200 000. 2. Goodwill is estimated at 50 000, but should not be recorded in the books of the new partnership. 3. All reserves must be writte back. 4. The new profit sharing ratio for A and B is 1:1. 5. C will receive 10 000 cash and the rest should be converted to a loan. Required: prepare the capital accounts in column format to display the above.

Answer 1

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