Accounting Answers

Case studies Availability and Consequences of Credit Purchases Mr.Krishna is willing to buy a Motor Lorry of R 1000000 from the Mayur Motor Company by paying cash of Rs 2,00,000. He want to pay the balance through instalments of Rs 1.60.000 rachat an interest of 5% on 31 December every year for 5 years Krishna wants to know about the different financial services provided by the Mayur Motor Company. As u Finance Manager of Mayur Motor Company, you are required to suggest Mr.

Krishna Regarding the types of Credit Purchase be can uvail from your concern

What will be the total interest borne by Mr. Krishna for the credit purchase made by him?

What consequences will the purchaser face

li the non-payment of installment Advise

Grant Limited recognised the following assets and liabilities in its financial statements at 30 June
2019:
Carrying amount Fair value
Property, plant and equipment
Inventory
Long term loan
Accounts payable
8 500 000
4 200 000
(3 500 000)
(1 650 000)
12 000 000
4 400 000
(3 500 000)
(1 650 000)
R7 550 000 R11 250 000
The current market interest rate for similar transactions is 8,5% per annum.

Grant Limited owned some unrecognised trademarks with an estimated fair value of R500 000 at 30
June 2019.Phakama Limited resolved to acquire all the share capital of Grant Limited on 1 July 2019,
and agreed to pay R13 000 000 in cash on 1 July 2020 in full settlement of the acquisition.
Required:
1. Calculate the purchase consideration.
2. Determine the acquisition date.
3. Calculate the amount of goodwill, if any, acquired.
4. Prepare the journal entries required in the records of Phakama Limited, relating to this transaction
and the subsequent payment of the purchase consideration

Grant Limited recognised the following assets and liabilities in its financial statements at 30 June
2019:
Carrying amount Fair value
Property, plant and equipment
Inventory
Long term loan
Accounts payable
8 500 000
4 200 000
(3 500 000)
(1 650 000)
12 000 000
4 400 000
(3 500 000)
(1 650 000)
R7 550 000 R11 250 000
The current market interest rate for similar transactions is 8,5% per annum.
Scenario 1
Phakama Limited resolved to acquire all the assets and liabilities of Grant Limited on 1 July 2019, and
agreed to pay R12 800 000 in cash on 1 July 2020 in full settlement of the acquisition.
Required:
1. Calculate the purchase consideration.
2. Determine the acquisition date
3. Calculate the amount of goodwill, if any, acquired.
4. Prepare the journal entries required in the records of Phakama Limited, relating to this transaction
and the subsequent payment of the purchase consideration.

Trial balance include
Capital
Motor vehicles
Bank overdraft
Sales
Sales returns
Discount received
Discount allowed
Fixed deposit
Interest on fixed deposit
Repairs
Loan
Interest on loan
Purchases
Railage on purchases
Insurance
Drawings
Debtor
Creditor
Using any amout...please show what is debited and credited

Theyearstofollowwerenotfavorabletothepartnership.AtthistimethecapitalbalancesofZevulunandBinyaminhadbeenreduced to $60,000 and $30,000, respectively. The partnership was left with $50,000 cash, $190,000 in noncash assets, and $150,000 in liabilities. The partners decided to liquidate the partnership. Noncash assets were all sold for cash, and all liabilities were paid off. Prepare a liquidation schedule and corresponding journal entries for each of the following independent assumptions:
a) The noncash assets were sold for $200,000; the profit sharing ratio was equal. (12 points)
b) The noncash assets were sold for $120,000; the profit sharing ratio was equal; Binyamin paid cash for any capital deficiency. (12 points)
c) Same information as (b) but Binyamin was insolvent (start from after payment of liabilities).

3) Preparethejournalentriesforthefollowingtransactions(2pointseach):
a) After several years of the partnership’s growing success, at which time the capital balances of Yissachar and Zevulun were $500,000
and $300,000, respectively, the partnership decided to admit a third partner, Binyamin , hoping that his skills and expertise would help expand the partnership’s growth tremendously. Binyamin invested $100,000 cash into the partnership for a one-sixth ownership. Assume equal sharing of profit and loss among the partners.
b) Soon after, Yissachar sold his interest in the partnership to Lavan. Lavan paid Yissachar $500,000.
c) Due to Lavan’s crooked handling of partnership assets, the partnership decided to force him out. His capital balance was still
unchanged. The partnership paid him $425,000

YissacharandZevulunPartnership’sfirstyeargeneratedanetincomeof$60,000.TheprofitsharingagreementprovidedthatYissachar would receive a salary allowance of $15,000, each partner would receive a 10% interest allowance on his capital balance (as calculated in question (1) above), and the remainder would be shared equally. Prepare a schedule of division of net income (5 points) and journalize the allocation of net income to each partner

On January 1, 2015, Oskar, Lucy and Dexter agreed to dissolve their partnership. Their partnership agreement allocates profit and losses equally among the partners. The current period’s ending capital account balances are Oskar, $15,000, Lucy, $10,000, and Dexter, $(6,000). After all the assets are sold and liabilities are paid, but before any contributions to cover any deficiencies, there is $19,000 in cash to be distributed.
REQUIRED:Prepare the journal entries to end the partnership under each of the following unrelated assumptions. Explanation is not required.
a) Dexter pays $6,000 to cover the deficiency in his account. (5 Marks)
b) Dexter is unable to cover the deficiency in his account

Lang, Morris and Chen are partners with capital balances as follows: Lang, $306,000; Morris, $102,000; and Chen, $204,000. The partners share profits and losses in a 1:2:1 ratio. LeBlanc is admitted to the partnership with a 20% equity.
Required:Prepare journal entries to record the entry of LeBlanc under each of the following unrelated assumptions (Show all calculations):
a. LeBlanc invests $153,000 cash. (2 marks)
b. LeBlanc invests $108,000 cash. (4 marks)
c. LeBlanc invests $246,000 (4 marks)
d. Partnership profit for the year following LeBlanc’s admission to the partnership is $300,000. Prepare the journal entry to close the Income Summary account to the partners’ capital accounts. (4 marks)

Interestvon cash credit_600000
Discount on bills-450000
Office expenses240000
Rebate on bills discounted46000
Rent -140000
Directors remuneration90000
Amount charged against current acc-70000
Interest on deposits640000
Printing and stationary16000
Commission brokerage180000
Adjustments to be made:
Rebate on bills discounted58000
Provision required for bad debts40000
Prepare profit and loss accountin acconts of banking companies based on corporate accounting