3. Financial accounting (A Level)
A section of Accounting, 9706
Listing 10 of 734 questions
L, M and N are in partnership, sharing profits and losses equally. On 31 December 2020 N retired. At that date: N’s capital account balance was $30 000 and his current account had a debit balance of $5400. Profit for the year was $21 000 before paying L’s salary of $6000. The goodwill was valued at $18 000 but is not to remain in the books of account. Other assets are to be revalued upwards by $6000. How much will N be entitled to on his retirement?
9706_s21_qp_11
MCQ
2021
Paper 1, Variant 1
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V and E are in partnership, sharing profits and losses equally. Their capital accounts showed the following credit balances at 31 March 2021. $ V 80 000 E 40 000 Z was admitted as a partner on 1 April 2021. At that date the following items were taken into account. Non-current assets were revalued downwards by $20 000. Goodwill was valued at $80 000, but will not remain in the books of account after Z is admitted. The new profit-sharing ratio will be V 40%, E 30% and Z 30%. What was the balance on E’s capital account after the admission of Z?
9706_s21_qp_12
MCQ
2021
Paper 1, Variant 2
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P and Q were in partnership, sharing profits and losses equally. R was admitted to the partnership. The terms of R’s admission were as follows. R introduced capital of $20 000 cash and a vehicle valued at $6000. Non-current assets were revalued upwards by $14 000. Goodwill was valued at $10 000, but will not be retained in the books of account. The new future profit-sharing ratio will be P, Q, R, 2 : 2 : 1. What was the opening balance on R’s capital account?
9706_s21_qp_13
MCQ
2021
Paper 1, Variant 3
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Cherry, Winston and Yupar were in partnership sharing profits and losses in the ratio 3 : 5 : 2. The partners decided to dissolve their partnership on 1 December 2020. On this date the partnership’s statement of financial position was as follows. Assets $ $ Non-current assets at net book value Premises 97 000 Furniture and equipment 22 000 119 000 Current assets Inventory 17 400 Total assets 136 400 Capital and liabilities Capital accounts Cherry 18 300 Winston 54 900 Yupar 26 700 99 900 Current accounts Cherry (5 740) Winston 2 290 Yupar (2 630) Non-current liability Loan from Yupar 18 000 Current liabilities Trade payables 14 800 Bank overdraft 6 330 21 130 Total capital and liabilities 136 400 The following information is also available. Winston took over the equipment at a valuation of $7200. Premises and furniture were sold for $61 100 and a cheque for this amount was received. Inventory was sold at a loss of $5200. A cheque was received for the amount. Trade payables were settled in full by cheque after deducting a 5% cash discount. The expenses of dissolution were paid by cheque, $2140. The amounts owed by, or to, the partners were settled by cheque. REQUIRED Prepare the realisation account to show the profit or loss made on the dissolution of the partnership. Realisation account $ $ Prepare, on the next page, the capital accounts of the partners recording the dissolution and final settlement of the amounts owed to, or by, each partner. Additional information The partners had decided to dissolve their partnership because of disagreements on important decisions. REQUIRED State three other reasons why a partnership might be dissolved.
9706_s21_qp_23
THEORY
2021
Paper 2, Variant 3
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Questions Discovered
734