Realisation Account – NBC Institute

FA – May 2014 – L1 – SA – Q14 – Partnership Account

Identifies the account used for recording the sale of assets during partnership dissolution.

Question

In partnership business, the account maintained to determine the profit or loss arising from the sale of assets on dissolution is called
A. Revaluation Account
B. Asset Disposal Account
C. Profit or Loss Account
D. Receipt and Payment Account
E. Realisation Account

Answer

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Tags: Asset Disposal, Dissolution, Partnership, Realisation Account
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2014

FA – Nov 2013 – L1 – SB – Q4 – Partnership Accounts

Preparation of ledger accounts for the dissolution of Fina and Funke's partnership.

Question

Fina and Funke, who are in partnership sharing profits and losses in a ratio of 2:1, decided to dissolve the partnership on 31 December 2012. At that date, their statement of financial position is as follows:

Statement of Financial Position as at 31 December 2012

The partners were unable to dispose of the business as a going concern but sold the non-current assets and inventory for N483,750. Trade receivables were collected in full, and the outstanding suppliers gave discounts totaling N1,250, while the dissolution expenses amounted to N10,000.

You are required to:
Prepare necessary ledger accounts to close the books of Fina and Funke.

Answer

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Tags: Dissolution, Ledger Accounts, Partners’ Capital, Partnership, Realisation Account
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2013

FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements

Prepare the Realisation accounts and Partners' capital accounts for Santasi, Patasi, Bremang, and Asafo on amalgamation.

Question

Santasi and Patasi are in partnership sharing profits and losses in the ratio 3:2. They decided to amalgamate their firm with that of another partnership, Bremang and Asafo, as at 30 June 2015. Bremang and Asafo share profits and losses in the ratio 2:1.

The following were their statements of financial position as at that date:

Additional Information:
The terms of the amalgamation, concluded on 30 June 2015, were as follows:

Profits and losses were to be shared in the ratio of Santasi: Patasi: Bremang: Asafo = 2:2:1:1 respectively.
The values of goodwill of the two firms were agreed to be valued at two years’ purchase of the average profits of the last four accounting years to the year of amalgamation. No goodwill account is to be maintained in the books.
- Profits for the last five years (GH¢’000):

Year	Santasi & Patasi	Bremang & Asafo
2015	1,050	910
2014	910	820
2013	1,020	670
2012	950	450
2011	800	320

The new firm was to take over all the assets and liabilities of Santasi and Patasi. The following assets were revalued:
- Buildings: GH¢14,400,000
- Plant & Equipment: GH¢10,400,000
- Inventory: GH¢8,500,000
- Trade Receivables: GH¢5,000,000
The new firm was to take over all the assets and liabilities of Bremang and Asafo at the following agreed values:
- Plant & Equipment: GH¢9,500,000
- Inventory: GH¢9,900,000
- Trade Receivables: GH¢4,900,000
The capital of the new firm was to be GH¢60,000,000, contributed according to their profit and loss sharing ratio. The balance due to or from the partners will be settled through the bank account of the new firm.

Required:

Prepare the Realisation account in the books of each of the old firms as at 30 June 2015.
Prepare the partners’ capital accounts in a columnar form, for the period to 1 July 2015.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Accounts, Partnership Accounting, Partnership Amalgamation, Realisation Account
Level: Level 2

Topic: Preparation of Financial Statements
Series: NOV 2016

FA – May 2017 – L1 – Q1 – Inventory | Preparation of Partnership accounts | The IASB’s Conceptual Framework

Dissolution of partnership and preparation of realization, cash, and capital accounts; explanation of inventories and elements of financial statements.

Question

a) B & C Brothers are partners sharing profits and losses equally between themselves for many years. However, they have now decided to dissolve their partnership as at 31 December 2016. Below is their Statement of financial position as at 31 December, 2016:

Statement of Financial Position as at 31 December, 2016

	GH¢000	GH¢000
Non-Current Assets:
Land and Buildings	3,200
Furniture and Fittings	3,400	6,600
Current Assets:
Trade receivables	11,200
Cash and Bank balances	7,200	18,400
Total Assets		25,000
Capital accounts:
B	8,000
C	6,000	14,000
Trade payables		11,000
Total Capital and Liabilities		25,000

Additional information: At dissolution, the trade receivables realized was GH¢10,800,000, the land and buildings GH¢1,600,000 and the furniture and fittings GH¢3,800,000. The expenses incurred on dissolution were GH¢400,000 and discounts amounted to GH¢800,000 were received from suppliers.

Required: i) Prepare Realisation Account (5 marks)

ii) Prepare Cash Account (3 marks)

iii) Prepare Partners’ Capital Account (2 marks)

b) The objective of IAS 2 Inventories is to prescribe the accounting treatment for inventories and provide guidance for measuring and valuation of inventories. It determines the cost of inventories and subsequent recognition as an expense, including any write-down to net realizable value.

Required: i) Explain Inventories. (3 marks)

ii) Explain how inventories are measured and valued in the financial statements in accordance with IAS 2. (3 marks)

c) In order to enhance the quality of information in financial statements, business transactions are grouped into different classes or categories on the basis of their economic characteristics. The broad classes or categories are called elements of financial statements.

Required: Explain any TWO elements of financial statements in line with the IASB Conceptual Framework for Financial Reporting and identify their criteria for recognition. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Dissolution, Financial Reporting, Inventory, Partnership, Realisation Account
Level: Level 1

Topic: Inventory, Preparation of Partnership accounts, The IASB’s Conceptual Framework
Series: MAY 2017

FA – May 2014 – L1 – SA – Q14 – Partnership Account

Identifies the account used for recording the sale of assets during partnership dissolution.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Disposal, Dissolution, Partnership, Realisation Account
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: MAY 2014

FA – Nov 2013 – L1 – SB – Q4 – Partnership Accounts

Preparation of ledger accounts for the dissolution of Fina and Funke's partnership.

Question

Statement of Financial Position as at 31 December 2012

You are required to:
Prepare necessary ledger accounts to close the books of Fina and Funke.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Dissolution, Ledger Accounts, Partners’ Capital, Partnership, Realisation Account
Level: Level 1

Topic: Partnership Accounts (Including Profit Sharing, Capital and Current Accounts)
Series: NOV 2013

FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements

Prepare the Realisation accounts and Partners' capital accounts for Santasi, Patasi, Bremang, and Asafo on amalgamation.

Question

The following were their statements of financial position as at that date:

Additional Information:
The terms of the amalgamation, concluded on 30 June 2015, were as follows:

Profits and losses were to be shared in the ratio of Santasi: Patasi: Bremang: Asafo = 2:2:1:1 respectively.
The values of goodwill of the two firms were agreed to be valued at two years’ purchase of the average profits of the last four accounting years to the year of amalgamation. No goodwill account is to be maintained in the books.
- Profits for the last five years (GH¢’000):

Year	Santasi & Patasi	Bremang & Asafo
2015	1,050	910
2014	910	820
2013	1,020	670
2012	950	450
2011	800	320

The new firm was to take over all the assets and liabilities of Santasi and Patasi. The following assets were revalued:
- Buildings: GH¢14,400,000
- Plant & Equipment: GH¢10,400,000
- Inventory: GH¢8,500,000
- Trade Receivables: GH¢5,000,000
The new firm was to take over all the assets and liabilities of Bremang and Asafo at the following agreed values:
- Plant & Equipment: GH¢9,500,000
- Inventory: GH¢9,900,000
- Trade Receivables: GH¢4,900,000
The capital of the new firm was to be GH¢60,000,000, contributed according to their profit and loss sharing ratio. The balance due to or from the partners will be settled through the bank account of the new firm.

Required:

Prepare the Realisation account in the books of each of the old firms as at 30 June 2015.
Prepare the partners’ capital accounts in a columnar form, for the period to 1 July 2015.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital Accounts, Partnership Accounting, Partnership Amalgamation, Realisation Account
Level: Level 2

Topic: Preparation of Financial Statements
Series: NOV 2016

FA – May 2017 – L1 – Q1 – Inventory | Preparation of Partnership accounts | The IASB’s Conceptual Framework

Dissolution of partnership and preparation of realization, cash, and capital accounts; explanation of inventories and elements of financial statements.

Question

Statement of Financial Position as at 31 December, 2016

	GH¢000	GH¢000
Non-Current Assets:
Land and Buildings	3,200
Furniture and Fittings	3,400	6,600
Current Assets:
Trade receivables	11,200
Cash and Bank balances	7,200	18,400
Total Assets		25,000
Capital accounts:
B	8,000
C	6,000	14,000
Trade payables		11,000
Total Capital and Liabilities		25,000

Required: i) Prepare Realisation Account (5 marks)

ii) Prepare Cash Account (3 marks)

iii) Prepare Partners’ Capital Account (2 marks)

Required: i) Explain Inventories. (3 marks)

ii) Explain how inventories are measured and valued in the financial statements in accordance with IAS 2. (3 marks)

Required: Explain any TWO elements of financial statements in line with the IASB Conceptual Framework for Financial Reporting and identify their criteria for recognition. (4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Dissolution, Financial Reporting, Inventory, Partnership, Realisation Account
Level: Level 1

Topic: Inventory, Preparation of Partnership accounts, The IASB’s Conceptual Framework
Series: MAY 2017

Question Tag: Realisation Account

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FA – May 2014 – L1 – SA – Q14 – Partnership Account

Identifies the account used for recording the sale of assets during partnership dissolution.

FA – Nov 2013 – L1 – SB – Q4 – Partnership Accounts

Preparation of ledger accounts for the dissolution of Fina and Funke's partnership.

FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements

Prepare the Realisation accounts and Partners' capital accounts for Santasi, Patasi, Bremang, and Asafo on amalgamation.

FA – May 2017 – L1 – Q1 – Inventory | Preparation of Partnership accounts | The IASB’s Conceptual Framework

Dissolution of partnership and preparation of realization, cash, and capital accounts; explanation of inventories and elements of financial statements.

FA – May 2014 – L1 – SA – Q14 – Partnership Account

Identifies the account used for recording the sale of assets during partnership dissolution.

FA – Nov 2013 – L1 – SB – Q4 – Partnership Accounts

Preparation of ledger accounts for the dissolution of Fina and Funke's partnership.

FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements

Prepare the Realisation accounts and Partners' capital accounts for Santasi, Patasi, Bremang, and Asafo on amalgamation.

FA – May 2017 – L1 – Q1 – Inventory | Preparation of Partnership accounts | The IASB’s Conceptual Framework

Dissolution of partnership and preparation of realization, cash, and capital accounts; explanation of inventories and elements of financial statements.

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FA – May 2014 – L1 – SA – Q14 – Partnership Account

Identifies the account used for recording the sale of assets during partnership dissolution.

You're reporting an error for "FA – May 2014 – L1 – SA – Q14 – Partnership Account"

FA – Nov 2013 – L1 – SB – Q4 – Partnership Accounts

Preparation of ledger accounts for the dissolution of Fina and Funke's partnership.

You're reporting an error for "FA – Nov 2013 – L1 – SB – Q4 – Partnership Accounts"

FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements

Prepare the Realisation accounts and Partners' capital accounts for Santasi, Patasi, Bremang, and Asafo on amalgamation.

You're reporting an error for "FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements"

FA – May 2017 – L1 – Q1 – Inventory | Preparation of Partnership accounts | The IASB’s Conceptual Framework

Dissolution of partnership and preparation of realization, cash, and capital accounts; explanation of inventories and elements of financial statements.

You're reporting an error for "FA – May 2017 – L1 – Q1 – Inventory | Preparation of Partnership accounts | The IASB’s Conceptual Framework"

FA – May 2014 – L1 – SA – Q14 – Partnership Account

Identifies the account used for recording the sale of assets during partnership dissolution.

You're reporting an error for "FA – May 2014 – L1 – SA – Q14 – Partnership Account"

FA – Nov 2013 – L1 – SB – Q4 – Partnership Accounts

Preparation of ledger accounts for the dissolution of Fina and Funke's partnership.

You're reporting an error for "FA – Nov 2013 – L1 – SB – Q4 – Partnership Accounts"

FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements

Prepare the Realisation accounts and Partners' capital accounts for Santasi, Patasi, Bremang, and Asafo on amalgamation.

You're reporting an error for "FR – Nov 2016 – L2 – Q5a – Preparation of Financial Statements"

FA – May 2017 – L1 – Q1 – Inventory | Preparation of Partnership accounts | The IASB’s Conceptual Framework

Dissolution of partnership and preparation of realization, cash, and capital accounts; explanation of inventories and elements of financial statements.

You're reporting an error for "FA – May 2017 – L1 – Q1 – Inventory | Preparation of Partnership accounts | The IASB’s Conceptual Framework"

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