3.1. Preparation of financial statements
A subsection of Accounting, 9706, through 3. Financial accounting (A Level)
Listing 10 of 678 questions
Paul and Angela are in partnership sharing profits and losses in the ratio of 3:2 respectively. No separate current accounts are maintained. On 1 May 2017, Rachael was admitted into the partnership. State two advantages to existing partners of introducing a new partner. State two disadvantages to existing partners of introducing a new partner. A summarised statement of financial position at 30 April 2017 before the admission of Rachael is as follows: $ Non-current assets 225 000 Cash and cash equivalents 7 450 Other current assets 61 500 293 950 Capital accounts: Paul 145 000 Angela 95 000 Current liabilities 53 950 293 950 The following information is available: Rachael paid $75 000 as capital into the partnership bank account. Goodwill was valued at $50 000. No goodwill account was to be maintained in the books of account. Non-current assets were revalued at $270 000. Current assets (excluding cash and cash equivalents) were revalued at $40 500. Current liabilities were revalued at $45 950. Paul, Angela and Rachael will share profits and losses in the ratio 5:3:2 respectively. REQUIRED Calculate the profit or loss from revaluation on 1 May 2017 when Rachael was admitted. Show how this is divided between the partners. Profit or loss from revaluation Division between partners Prepare, on the next page, the partners’ capital accounts on 1 May 2017 after the admission of Rachael. Explain why an adjustment for goodwill may be made when a new partner joins a business. State two factors that may result in the creation of goodwill for a business.
9706_m18_qp_22
THEORY
2018
Paper 2, Variant 2
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Mira, Sasha and Peta have been trading as a partnership. They share profits and losses in the ratio of 2 : 2 : 1 respectively. The partnership ceased trading on 31 January 2019. REQUIRED State four reasons why a partnership may be dissolved. REQUIRED Prepare the partnership realisation account. Prepare, on the next page, the partners’ capital accounts on dissolution. Prepare the final bank account to show the closure of the partnership. Suggest two reasons why the trade receivables did not pay the full amount they owed.
9706_m19_qp_22
THEORY
2019
Paper 2, Variant 2
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