Kamal, Teoh and Mohan are in a legal partnership. The following balances were extracted from the...

Kamal, Teoh and Mohan are in a legal partnership. The following balances were extracted from the partnership books of account as at 31 March 2018.

	RM	RM
Capital account as at 1 April 2017:
Kamal		72,000
Teoh		62,000
Mohan		52,000
Current account as at 1 April 2017:
Kamal	45,000
Teoh	44,000
Mohan	43,000
Land and building	102,000
Accumulated depreciation		66,000
Fixtures and fittings	52,000
Accumulated depreciation		46,000
Inventories	45,500
Accounts receivable (net)	67,000
Bank	83,500
Accounts payable		54,000
Revaluation surplus		63,500
Net profit for the year		66,500
	482,000	482,000

Additional information:

1. The partnership profit sharing ratio is 3:2:1.
The partners will be entitled to 15 percent interest per annum on capital account balances.
Kamal retired on 31 December 2017. Upon his retirement the assets are revalued resulting a revaluation surplus of RM63,500.
Goodwill was valued at two year’s purchase of the average profit for the last three years. The profit for the last three years were:

	RM
31 March 2017	90,000
31 March 2016	56,000
31 March 2015	52,000

Due to his retirement, Kamal’s current account is to be transferred to his capital account. The partnership agreed to pay the amount due to Kamal, except for RM92,000 which remain as a loan to the partnership.
Following Kamal’s decision to retire, Teoh and Mohan invited Salim to join the partnership on 1 January 2018. Salim agreed to pay RM57,000 into the new partnership as his capital contribution and RM49,000 for his share of goodwill. This entry has not been recorded in the books upon admission of Salim.
The new partnership profit sharing ratio is 2:1:1.
The net profit for the year is deemed to have been earned evenly throughout the year.

REQUIRED:

Compute the goodwill for the partnership.
Prepare the partnership appropriation account incorporating the pre and post period for the year ended 31 March 2018.
Prepare the partner’s current account in a columnar form.
Prepare the partner’s capital account in a columnar form.

Expert Solution

Answers are in the photos attached

Read notes and assumptions carefully.

ekkarill92 answered 1 year ago

Wang Yee is a manufacturer. The following balances were extracted from his books on 31 January...

Wang Yee is a manufacturer. The following balances were extracted from his books on 31 January 2010. $ Inventories (stocks) 1 February 2009 Raw materials 14 700 Work in progress 23 570 Finished goods 35 000 Purchases of raw materials 75 600 Purchases of finished goods 15 500 Direct factory wages 62 140 Rent 28 000 Factory management salaries 31 500 Office salaries 41 600 Revenue (sales) 342 500 Revenue (sales returns) 1 250 Distribution costs 28 650 Sundry office...

The list of balances were extracted from the books of Ga West District Assembly as at...

The list of balances were extracted from the books of Ga West District Assembly as at 31st December, 2018. GHS000 Bank 53,000 Petty Cash 2,000 Property Rate 20,000 Penalties received 3,000 Licenses 22,500 Inventory 15,000 Building and Structure 32,500 Basic rate 12,400 Land Revenues 6,300 Time Merchants License 13,650 Fines 9,700 Water rate 4,500 Social Benefits 6,500 Market fees 1,320 Sundry revenue 48,225 Work-In-progress 48,500 Repairs to market facilities 3,600 Parks and recreational costs 7,500 Wages and Salaries 4,900 Remuneration...

Question 2 (28 marks) The following opening balances were extracted from the books of Corn Shop...

Question 2 The following opening balances were extracted from the books of Corn Shop on 1 Feb 2017: Debit Credit N$ N$ Non-Current Assets 98 550 Receivables 11 200 Bank 7 250 Payables 7 130 Electricity Due 940 Capital 94 430 109 750 109 750 The following transaction took place for the month of February 2017:  Feb, 2 Purchased goods on credit at a cost of N$7 200.  Feb, 5 Sold goods on credit for N$6 000. ...

he following balances were extracted from the books of Meena Gallery, selling gifts, souvenirs and antiques...

he following balances were extracted from the books of Meena Gallery, selling gifts, souvenirs and antiques for the year ended 31 December 2019: Debit (RM) Credit (RM) Capital 245,530 5% bank loan 109,000 Building 150,000 Motor vehicles 80,000 Office equipment 60,000 Accumulated depreciation as at 1 January 2019: Motor Vehicle 40,000 Office equipment 8,000 Commission received 6,800 Rental income 4,800 Accounts receivables and accounts payables 40,000 34,500 Purchases returns and sales returns 15,000 8,000 Purchases and sales 150,000 350,000 Allowance...

Roy Reds Ltd is a Manufacturing Company.The Following Ledger account balances were extracted from the books...

Roy Reds Ltd is a Manufacturing Company.The Following Ledger account balances were extracted from the books of the company for the year ended December 31,2004 stocks as at January1,2004: Raw materials$40000,Partly manufactured good (WIP) $50000,Finished Goods $37000 Stocks as at December 31,2004: Raw Materials $30000,Partly Manufactured goods (WIP) $60000 Finished Goods $45000 Other balances: Purchases of raw materials$136000,freight and carriage on raw materials $5000,production workers salary $170000,Rent and Rates$8000,Gas and Fuel $15000,office workers pay $20000,Depreciation of productive machinery and plant...

The following information are the balances extracted from the books of Xxx for the year ended...

The following information are the balances extracted from the books of Xxx for the year ended 31 December 2017: accounts dr cr opening stock 8000 buildings 15000 debitors 4000 purchases 22000 salaries 1200 sales 36000 discount 800 sales returns 1000 furniture 3000 office exp 300 wages 600 purchase returns 600 interest 500 travelling exp 400 insurance 600 machinery 8000 carriage on purchases 800 commission 600 cash in hand 1400 rent and rates 2400 capital 25000 creditors 8000 totals 70100 70100...

The following balances have been extracted from the books of XYZ Company for the year to...

The following balances have been extracted from the books of XYZ Company for the year to 31/12/2019 Dr Cr US$ US$ Cash at bank and in hand 10,000 Plant and equipment: At cost 70,000 Accumulated depreciation (at 31.12.19) 25,000 Retained earnings (at 1.2.2020) 15,000 Profit for the financial year (to 31.12.19) 20,000 Share capital (issued and fully paid) 50,000 Inventory (at 31.12.19) 27,000 Trade payables 17,000 Trade receivables 20,000 127,000 127,000 Additional information: 1 Corporation tax owing at 31 December...

QUESTION 1 The following list of balances was extracted from the books of Ketumbar Enterprise as...

QUESTION 1 The following list of balances was extracted from the books of Ketumbar Enterprise as at 30 June 2019. RM Purchases 84,750 Sales 149,750 Return inwards 3,250 Return outwards 2,250 Drawings 4,750 Inventory (1 July 2018) 12,950 Buildings 79,750 Motor vehicles (cost RM34,750) 22,150 Fixtures and fittings (cost RM24,250) 19,350 Cash at bank 15,600 Salaries 16,550 Carriage inwards 3,150 Carriage outwards 4,300 Account receivable 29,750 Account payable 14,750 Water and electricity 3,640 Insurance 2,160 Provision for...

The following list of balances as at 30 September 20X9 has been extracted from the books...

The following list of balances as at 30 September 20X9 has been extracted from the books of Brick and Stone, trading partnership, sharing the balance of profits and losses in the proportions 3:2 respectively. Ksh Ksh Printing, stationery and postage 3,500 Sales 322,100 Stock in hand at 1 October 20X8 23,000 Purchases 208,200 Rent and rates 10,300 Staff salaries 36,100 Telephone charges 2,900 Motor vehicle running costs 5,620 Discounts allowable 950 Discount receivable 370 Sales returns 2,100 Purchases returns 6,100...

Q1. The following balances have been extracted from the books of Caswell Ltd as at 31...

Q1. The following balances have been extracted from the books of Caswell Ltd as at 31 December 2009. £ £ £1 ordinary shares 600,000 6% preference shares 600,000 5% debentures 480,000 Share premium account 330,000 Debenture interest paid 12,000 Bad debts written off 20,280 Provision for doubtful debts 24,480 Cash in hand 18,960 Debtors & Creditors 207,000 78,000 Bank balance 379,200 Land at cost 540,000 Buildings at cost 1,140,000 Fixtures and fittings at cost 660,000 Accumulated depreciation: Buildings...

Question