Partnership Dissolution – NBC Institute

FA – Mar/July 2020 – L1 – SB – Q6 – Partnership Accounts

Preparing revaluation, capital, and bank accounts for a partnership dissolution.

Question

Babatunde and Rasheed have been in partnership for several years, sharing profits and losses in the ratio 2:1 respectively. Their statement of financial position as at December 31, 2019, is shown below:

Required:
Prepare the following accounts:
a. Revaluation account
b. Capital accounts
c. Bank account

Answer

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Tags: Capital Account, Financial Statements, Partnership Dissolution, Revaluation Account
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAR/JULY 2020

FR – May 2019 – L2 – Q5a – Professional and Ethical Issues in Financial Reporting

Explanation of differences between dissolution of a partnership and a limited liability company.

Question

The dissolution of a partnership is the process during which the affairs of the partnership are wound up. This should not be confused with the term dissolution when applied to a limited company, which is the event that marks the conclusion of the winding-up.

Required:

Explain THREE (3) differences between the dissolution of a partnership and the dissolution of a limited liability company.

Answer

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Tags: Legal Differences, Limited Liability Company Dissolution, Partnership Dissolution
Level: Level 2

Topic: Professional and Ethical Issues in Financial Reporting
Series: MAY 2019

FA – May 2021 – L1 – Q2 – Accruals and prepayments | Bad and doubtful debt | Preparation of Partnership accounts

Preparation of ledger accounts for accruals and prepayments and accounts on the dissolution of a partnership.

Question

a) The following information is available from the books of Twibom Ltd.

Item	1 January 2020 (GH¢)	31 December 2020 (GH¢)
Interest received	680 Accrued	750 Accrued
General expenses	5,200 Prepaid	3,180 Accrued
Allowance for receivables	1,350	–
Receivables	45,000	56,000

During the year ended 31 December 2020, the following amounts were received or paid (all transactions were through the bank account).

Date	Transaction	Amount (GH¢)
31 March	Interest received	1,280
4 August	General expenses paid	4,500
5 December	Rent paid	27,000

The rent is due in equal monthly installments. The payment for rent covered the period from 1 January 2020 to 31 March 2021.

The allowance for receivables is to be set using the same percentage of receivables as in the previous year.

Required:
Prepare the following ledger accounts for the year ended 31 December 2020.
i) Interest Received (1 mark)
ii) General Expenses (1 mark)
iii) Rent (1 mark)
iv) Allowance for Receivables (2 marks)

b) Agbeko, Musah, and Osei had been in partnership for several years sharing profits and losses in the ratio 5:3:2. On 1 January 2021, they decided to dissolve their partnership after a disagreement. The Statement of Financial Position of the partnership as at 31 December 2020, was as follows:

Additional Information

The plant and machinery were sold for GH¢98,200.
The inventory was sold for GH¢40,500.
The Receivables realized GH¢62,000.
The motor vehicles were taken over by Agbeko at an agreed value of GH¢40,800.
The furniture and fittings were sold for GH¢50,400.
A discount of GH¢4,320 was received when payables were paid off.
The loan was repaid in full on 1 January 2021.
There were no outstanding interest payments on the loan.
Dissolution expenses amounted to GH¢3,000.

Required:
Prepare the following accounts on dissolution:
i) Partners’ capital accounts (3 marks)
ii) Realization account (7 marks)
iii) Bank account (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowance for Receivables, Capital Account, General Expenses, Interest Received, Partnership Dissolution, Realization Account, Rent
Level: Level 1

Topic: Accruals and prepayments, Bad and doubtful debt, Preparation of Partnership accounts
Series: MAY 2021

FA – Mar/July 2020 – L1 – SB – Q6 – Partnership Accounts

Preparing revaluation, capital, and bank accounts for a partnership dissolution.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Account, Financial Statements, Partnership Dissolution, Revaluation Account
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAR/JULY 2020

FR – May 2019 – L2 – Q5a – Professional and Ethical Issues in Financial Reporting

Explanation of differences between dissolution of a partnership and a limited liability company.

Question

Required:

Explain THREE (3) differences between the dissolution of a partnership and the dissolution of a limited liability company.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Legal Differences, Limited Liability Company Dissolution, Partnership Dissolution
Level: Level 2

Topic: Professional and Ethical Issues in Financial Reporting
Series: MAY 2019

FA – May 2021 – L1 – Q2 – Accruals and prepayments | Bad and doubtful debt | Preparation of Partnership accounts

Preparation of ledger accounts for accruals and prepayments and accounts on the dissolution of a partnership.

Question

a) The following information is available from the books of Twibom Ltd.

Item	1 January 2020 (GH¢)	31 December 2020 (GH¢)
Interest received	680 Accrued	750 Accrued
General expenses	5,200 Prepaid	3,180 Accrued
Allowance for receivables	1,350	–
Receivables	45,000	56,000

During the year ended 31 December 2020, the following amounts were received or paid (all transactions were through the bank account).

Date	Transaction	Amount (GH¢)
31 March	Interest received	1,280
4 August	General expenses paid	4,500
5 December	Rent paid	27,000

The rent is due in equal monthly installments. The payment for rent covered the period from 1 January 2020 to 31 March 2021.

The allowance for receivables is to be set using the same percentage of receivables as in the previous year.

Additional Information

The plant and machinery were sold for GH¢98,200.
The inventory was sold for GH¢40,500.
The Receivables realized GH¢62,000.
The motor vehicles were taken over by Agbeko at an agreed value of GH¢40,800.
The furniture and fittings were sold for GH¢50,400.
A discount of GH¢4,320 was received when payables were paid off.
The loan was repaid in full on 1 January 2021.
There were no outstanding interest payments on the loan.
Dissolution expenses amounted to GH¢3,000.

Required:
Prepare the following accounts on dissolution:
i) Partners’ capital accounts (3 marks)
ii) Realization account (7 marks)
iii) Bank account (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowance for Receivables, Capital Account, General Expenses, Interest Received, Partnership Dissolution, Realization Account, Rent
Level: Level 1

Topic: Accruals and prepayments, Bad and doubtful debt, Preparation of Partnership accounts
Series: MAY 2021

Question Tag: Partnership Dissolution

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FA – Mar/July 2020 – L1 – SB – Q6 – Partnership Accounts

Preparing revaluation, capital, and bank accounts for a partnership dissolution.

FR – May 2019 – L2 – Q5a – Professional and Ethical Issues in Financial Reporting

Explanation of differences between dissolution of a partnership and a limited liability company.

FA – May 2021 – L1 – Q2 – Accruals and prepayments | Bad and doubtful debt | Preparation of Partnership accounts

Preparation of ledger accounts for accruals and prepayments and accounts on the dissolution of a partnership.

FA – Mar/July 2020 – L1 – SB – Q6 – Partnership Accounts

Preparing revaluation, capital, and bank accounts for a partnership dissolution.

FR – May 2019 – L2 – Q5a – Professional and Ethical Issues in Financial Reporting

Explanation of differences between dissolution of a partnership and a limited liability company.

FA – May 2021 – L1 – Q2 – Accruals and prepayments | Bad and doubtful debt | Preparation of Partnership accounts

Preparation of ledger accounts for accruals and prepayments and accounts on the dissolution of a partnership.

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FA – Mar/July 2020 – L1 – SB – Q6 – Partnership Accounts

Preparing revaluation, capital, and bank accounts for a partnership dissolution.

You're reporting an error for "FA – Mar/July 2020 – L1 – SB – Q6 – Partnership Accounts"

FR – May 2019 – L2 – Q5a – Professional and Ethical Issues in Financial Reporting

Explanation of differences between dissolution of a partnership and a limited liability company.

You're reporting an error for "FR – May 2019 – L2 – Q5a – Professional and Ethical Issues in Financial Reporting"

FA – May 2021 – L1 – Q2 – Accruals and prepayments | Bad and doubtful debt | Preparation of Partnership accounts

Preparation of ledger accounts for accruals and prepayments and accounts on the dissolution of a partnership.

You're reporting an error for "FA – May 2021 – L1 – Q2 – Accruals and prepayments | Bad and doubtful debt | Preparation of Partnership accounts"

FA – Mar/July 2020 – L1 – SB – Q6 – Partnership Accounts

Preparing revaluation, capital, and bank accounts for a partnership dissolution.

You're reporting an error for "FA – Mar/July 2020 – L1 – SB – Q6 – Partnership Accounts"

FR – May 2019 – L2 – Q5a – Professional and Ethical Issues in Financial Reporting

Explanation of differences between dissolution of a partnership and a limited liability company.

You're reporting an error for "FR – May 2019 – L2 – Q5a – Professional and Ethical Issues in Financial Reporting"

FA – May 2021 – L1 – Q2 – Accruals and prepayments | Bad and doubtful debt | Preparation of Partnership accounts

Preparation of ledger accounts for accruals and prepayments and accounts on the dissolution of a partnership.

You're reporting an error for "FA – May 2021 – L1 – Q2 – Accruals and prepayments | Bad and doubtful debt | Preparation of Partnership accounts"

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