{"id":2277,"date":"2023-10-02T11:53:09","date_gmt":"2023-10-02T11:53:09","guid":{"rendered":"http:\/\/localhost\/ecole9ja\/?p=2277"},"modified":"2023-10-02T11:56:20","modified_gmt":"2023-10-02T11:56:20","slug":"week-2-ss1-second-term-financial-accounting-notes","status":"publish","type":"post","link":"https:\/\/ecolebooks.com\/nigeria\/posts\/week-2-ss1-second-term-financial-accounting-notes\/","title":{"rendered":"Week 2 and 3 – SS1 Second Term Financial Accounting Notes"},"content":{"rendered":"

WEEK TWO – THREE
\n<\/strong>ADMISSION OF NEW PARTNER AND RETIREMENT OF AN EXISTING PARTNER IN CONTINUING BUSINESS
\n<\/strong>Partnership changes usually occur during a financial year and the accounting records are contrived without interruption. Final accounts are prepared at the end of the financial year. When a partner leaves the firm or a new partner joins, it marks the end of one partnership and the beginning of a new one. No records and entries are made in the books as at the period of change until the end of the financial year. In the process, revaluation of asset, valuation of goodwill and changes in the profit\/loss sharing ratio may occur.
\nIllustration 5: Admission of a new partner
\n<\/strong>Dami and Lola have shared profits and losses in the ration of 3:2. On 1 October 2010, they decided to admit Bola as a partner. No entries to record Bola’s admittance as a partner were made in the books before the end of the financial year on 31 December 2010.
\nInformation extracted from the books for the year ended 31 December 2010 include the following:<\/p>\n

\n\n\n\n\n
\u00a0<\/td>\nN<\/td>\n<\/tr>\n
Turnover
\nCost of sales
\nWages
\nRent
\nGeneral expenses
\nDeprecation of fixed assets:
\n1 January to 30 December 2010
\n1 October to 31 December 2010 <\/td>\n		400,000
\n240,000
\n40,000
\n8,000
\n9,600<\/p>\n

\u00a06,000
\n4,350<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

\u00a0(based on the asset revaluation as shown below)<\/p>\n

\u00a0At December 2009, the balances on Dami and Lola’s capital and current accounts were as follows:<\/p>\n

\n\n\n\n\n\n\n
\u00a0<\/td>\nCapital Accounts<\/td>\nCurrent Accounts<\/td>\n<\/tr>\n
N<\/td>\nN<\/td>\n<\/tr>\n
Dami<\/td>\n50,000<\/td>\n2,000<\/td>\n<\/tr>\n
Lola<\/td>\n30,000<\/td>\n3,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

\u00a0On 1 October 2010, the partnership assets were revalued as follows:<\/p>\n

\n\n\n\n\n
\u00a0<\/td>\nN<\/td>\n<\/tr>\n
Freehold premises
\nOther fixed assets
\nCurrent assets<\/td>\n		50,000 increase
\n14,000 decrease
\n3,000 decrease<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

\u00a0The partners agreed the value of goodwill on 1 October 2010 at N40,000 and decided that no goodwill account should be opened in the books.
\nOn 1 October 2010, Bola paid N20,000 into the firm’s bank account as capital. On the same day, Dami lent the partnership N20,000. He is entitled to interest at a rate of 100% per annum on the loan.
\nThe balances on the partners drawings account at 31 December 2010 were as follows:<\/p>\n

\n\n\n\n\n
\u00a0<\/td>\nN<\/td>\n<\/tr>\n
Dami
\nLola
\nBola<\/td>\n		23,000
\n17,000
\n3,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

The new partnership agreement provided for the following as from 1 October 2010.<\/p>\n

    \n
  1. \n
    Interest was allowed on the balances on capital accounts on 31 December each year at a rate of 5% per annum.\n<\/div>\n<\/li>\n<\/ol>\n
      \n
    1. \n
      Lola was entitled to a salary of N12,000 per annum.\n<\/div>\n<\/li>\n<\/ol>\n
        \n
      1. \n
        The balance of profits and losses were to be shared. Dami – , Lola and Bola –\n<\/div>\n<\/li>\n<\/ol>\n

        Required:
        \n<\/strong><\/p>\n

          \n
        1. \n
          Prepared the capital accounts of Dami, Lola and Bola as at 31 December 2010.\n<\/div>\n<\/li>\n<\/ol>\n
            \n
          1. \n
            Prepare the partnership trading, profit and loss and appropriate account for the year ended 31 December 2010.\n<\/div>\n<\/li>\n
          2. \n
            Prepare the partners current accounts as at 31 December 2010.\n<\/div>\n<\/li>\n<\/ol>\n

            Solution
            \n<\/strong>Workings
            \n<\/strong>1. \u00a0\u00a0\u00a0\u00a0
            \nRevaluation a\/c
            \n<\/strong><\/p>\n

            \n\n\n\n\n
            Particulars<\/td>\nN<\/td>\nParticulars<\/td>\nN<\/td>\n<\/tr>\n
            Other fixed assets
            \nCurrent asset
            \nProfit to capital a\/c
            \nDami ( x 33,000) =
            \nLola ( x 33,000) = <\/td>\n            		14,000
            \n3,000<\/p>\n

            \u00a019,800
            \n13,200
            \n50,000<\/strong><\/td>\n

            		Freehold premises<\/td>\n50,000<\/p>\n

            \u00a0
            \n\u00a0
            \n\u00a0
            \n\u00a050,000<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

            \u00a0<\/p>\n

              \n
            1. \n
              Goodwill: Since the partners agreed that no goodwill account should be opened, then working of the share of goodwill to capital account is only shown as follows:\n<\/div>\n

              Value of goodwill N40,000 as at 1 October 2010 share to Dami and Lola in their old profit-sharing ratio as follows:
              \nDami ( x 40,000)\u00a0\u00a0\u00a0\u00a0=\u00a0\u00a0\u00a0\u00a024,000
              \nLola ( x 40,000) \u00a0\u00a0\u00a0\u00a0=\u00a0\u00a0\u00a0\u00a016,000
              \nGoodwill to be written off immediately from the books as follows using new profit-sharing ratio:
              \nDami ( x 40,000)\u00a0\u00a0\u00a0\u00a0=\u00a0\u00a0\u00a0\u00a016,000
              \nLola ( x 40,000)\u00a0\u00a0\u00a0\u00a0=\u00a0\u00a0\u00a0\u00a016,000
              \nBola ( x 40,000)\u00a0\u00a0\u00a0\u00a0=\u00a0\u00a0\u00a0\u00a08,000\n<\/li>\n

            2. \n
              Partners Capital Account<\/p>\n\n\n\n\n
              \u00a0<\/td>\nDami
              \n(N)<\/td>\n              		Lola
              \n(N)<\/td>\n              		Bola
              \n(N)<\/td>\n              		\u00a0<\/td>\nDami
              \n(N)<\/td>\n              		Lola
              \n(N)<\/td>\n              		Bola
              \n(N)<\/td>\n<\/tr>\n
              Goodwill w\/off
              \nBal c\/d<\/td>\n              		16,000
              \n77,800<\/p>\n

              \u00a0
              \n\u00a0
              \n\u00a093,800<\/strong><\/td>\n

              		16,000
              \n43,200<\/p>\n

              \u00a0
              \n\u00a0
              \n\u00a059,200<\/strong><\/td>\n

              		8,000
              \n12,000<\/p>\n

              \u00a0
              \n\u00a0
              \n\u00a020,000<\/strong><\/td>\n

              		Bal. b\/d
              \nBank
              \nProfit on Revaluation Goodwill<\/p>\n

              \u00a0Bal b\/d<\/td>\n

              		50,000<\/p>\n

              \u00a0
              \n\u00a019,800
              \n24,000
              \n93,800<\/strong>
              \n\t\t\t\t\t\t\t\t\t\t\t77,800<\/td>\n

              		30,000<\/p>\n

              \u00a0
              \n\u00a013,200
              \n16,000
              \n59,200<\/strong>
              \n\t\t\t\t\t\t\t\t\t\t\t43,200<\/td>\n

              		–
              \n20,000<\/p>\n

              \u00a0–
              \n–
              \n20,000<\/strong>
              \n\t\t\t\t\t\t\t\t\t\t\t12,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

              \u00a0<\/strong><\/div>\n

              \u00a0
              \n\u00a0
              \n\u00a0
              \n\u00a0<\/li>\n

            3. \n
              Dami, Lola and Bola
              \n<\/strong><\/div>\n

              Trading, Profit and loss and Appropriation Account for the Year Ended 31 December, 2010
              \n<\/strong>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 N
              \nTurnover\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0400,000
              \nLess: <\/strong>Cost of Sales\u00a0\u00a0\u00a0\u00a0240,000
              \nGross profit c\/d\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0160,000
              \n<\/strong><\/li>\n<\/ol>\n

              \u00a0\u00a0\u00a0\u00a0\u00a0<\/strong>9 months to 30\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a03 months to 31\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0year to
              \n\u00a0\u00a0\u00a0\u00a0September 2010\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0December 2010\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a031 December 2010<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
              \u00a0<\/td>\nN<\/td>\nN<\/td>\nN<\/td>\nN<\/td>\nN<\/td>\nN<\/td>\n<\/tr>\n
              Gross profit b\/d<\/td>\n\u00a0<\/td>\n120,000<\/td>\n\u00a0<\/td>\n40,000<\/td>\n\u00a0<\/td>\n160,000<\/td>\n<\/tr>\n
              Wages<\/td>\n30,000<\/td>\n\u00a0<\/td>\n10,000<\/td>\n\u00a0<\/td>\n40,000<\/td>\n\u00a0<\/td>\n<\/tr>\n
              Rent<\/td>\n6,000<\/td>\n\u00a0<\/td>\n2,000<\/td>\n\u00a0<\/td>\n8,000<\/td>\n\u00a0<\/td>\n<\/tr>\n
              General expenses<\/td>\n7,200<\/td>\n\u00a0<\/td>\n2,400<\/td>\n\u00a0<\/td>\n9,600<\/td>\n\u00a0<\/td>\n<\/tr>\n
              Interest on loan<\/td>\n–<\/td>\n\u00a0<\/td>\n500<\/td>\n\u00a0<\/td>\n500<\/td>\n\u00a0<\/td>\n<\/tr>\n
              Depreciation <\/td>\n6,000<\/td>\n(49,200)<\/td>\n4,350<\/td>\n(19,250)<\/td>\n10,250<\/td>\n(68,450)<\/td>\n<\/tr>\n
              Net profit<\/strong><\/td>\n\u00a0<\/td>\n70,800<\/strong><\/td>\n\u00a0<\/td>\n20,750<\/strong><\/td>\n\u00a0<\/td>\n91,550<\/strong><\/td>\n<\/tr>\n
              Interest on capital at 5% p.a.<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
              Dami – <\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n973<\/td>\n\u00a0<\/td>\n973<\/td>\n\u00a0<\/td>\n<\/tr>\n
              Lola – <\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n540<\/td>\n\u00a0<\/td>\n540<\/td>\n\u00a0<\/td>\n<\/tr>\n
              Bola – <\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n150<\/td>\n\u00a0<\/td>\n150<\/td>\n\u00a0<\/td>\n<\/tr>\n
              \u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n1,663<\/strong><\/td>\n\u00a0<\/td>\n1,663<\/strong><\/td>\n\u00a0<\/td>\n<\/tr>\n
              Salary \u2013 Lola<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n3,000<\/td>\n\u00a0<\/td>\n3,000<\/td>\n\u00a0<\/td>\n<\/tr>\n
              \u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n(4,663)<\/strong><\/td>\n\u00a0<\/td>\n(4,663)<\/strong><\/td>\n<\/tr>\n
              \u00a0<\/td>\n\u00a0<\/td>\n70,800<\/strong><\/td>\n\u00a0<\/td>\n16,087<\/strong><\/td>\n\u00a0<\/td>\n86,887<\/strong><\/td>\n<\/tr>\n
              Share of profit<\/strong><\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
              Dami (3\/5), (2\/5)<\/td>\n42,480<\/td>\n\u00a0<\/td>\n( \u00bd ) 6,435<\/td>\n\u00a0<\/td>\n48,915<\/td>\n\u00a0<\/td>\n<\/tr>\n
              Lola (2\/5), (2\/5)<\/td>\n28,320<\/td>\n\u00a0<\/td>\n( ) 6,435<\/td>\n\u00a0<\/td>\n34,755<\/td>\n\u00a0<\/td>\n<\/tr>\n
              Bola (1\/5)<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n( ) 3,217<\/td>\n\u00a0<\/td>\n3,217<\/td>\n\u00a0<\/td>\n<\/tr>\n
              \u00a0<\/td>\n\u00a0<\/td>\n70,800<\/strong><\/td>\n\u00a0<\/td>\n16,087<\/strong><\/td>\n\u00a0<\/td>\n86,887<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
                \n
              1. Partners’ Current Account
                \n\n\n\n\n\n\n\n\n\n\n\n
                \u00a0<\/td>\nDami <\/td>\nLola<\/td>\nBola<\/td>\n\u00a0<\/td>\nDami<\/td>\nLola<\/td>\nBola<\/td>\n<\/tr>\n
                \u00a0<\/td>\nN<\/strong><\/td>\nN<\/strong><\/td>\nN<\/strong><\/td>\n\u00a0<\/td>\nN<\/strong><\/td>\nN<\/strong><\/td>\nN<\/strong><\/td>\n<\/tr>\n
                Drawings<\/td>\n23,000<\/td>\n17,000<\/td>\n3,000<\/td>\nBal. b\/d<\/td>\n2,000<\/td>\n3,000<\/td>\n–<\/td>\n<\/tr>\n
                Bal. c\/d<\/td>\n29,388<\/td>\n24,295<\/td>\n367<\/td>\nLoan interest <\/td>\n500<\/td>\n–<\/td>\n–<\/td>\n<\/tr>\n
                \u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\nInt. on capital<\/td>\n973<\/td>\n540<\/td>\n150<\/td>\n<\/tr>\n
                \u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\nSalary<\/td>\n–<\/td>\n3,000<\/td>\n–<\/td>\n<\/tr>\n
                \u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\nShare of profit<\/td>\n48,915<\/td>\n34,755<\/td>\n3,217<\/td>\n<\/tr>\n
                \u00a0<\/td>\n52,388<\/strong><\/td>\n41,295<\/strong><\/td>\n3,367<\/strong><\/td>\n\u00a0<\/td>\n52,388<\/strong><\/td>\n41,295<\/strong><\/td>\n3,367<\/strong><\/td>\n<\/tr>\n
                \u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\nBal. b\/d<\/td>\n29,388<\/strong><\/td>\n24,295<\/strong><\/td>\n367<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

                \u00a0<\/strong><\/li>\n<\/ol>\n

                Essay Type Questions
                \n<\/strong><\/p>\n

                  \n
                1. \n
                  (a)\u00a0\u00a0\u00a0\u00a0Define ‘partnership’.\n<\/div>\n

                  (b)\u00a0\u00a0\u00a0\u00a0Is it possible for a partnership to exist without agreement? If so, why do you consider a written agreement to be desirable?
                  \n(c)\u00a0\u00a0\u00a0\u00a0Is it possible for a person
                  \n(i)\u00a0\u00a0\u00a0\u00a0To receive a share in the profits of a business without being liable as a partner therein;
                  \n(ii)\u00a0\u00a0\u00a0\u00a0To be liable as partner without receiving a share of the profits of a business?<\/p>\n

                  \u00a0<\/li>\n

                2. \n
                  The following trial balance has been extracted from the books of Sam and Dan at 30 April 2011.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
                  \u00a0<\/td>\nN<\/td>\nN<\/td>\n<\/tr>\n
                  Sales<\/td>\n\u00a0<\/td>\n425,000<\/td>\n<\/tr>\n
                  Purchases<\/td>\n200,000<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Stock at 1 May 2010<\/td>\n30,000<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Wages<\/td>\n98,000<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Rent<\/td>\n25,000<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Heating and lighting <\/td>\n16,000<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Office expenses<\/td>\n12,600<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Vehicle expenses<\/td>\n5,510<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Advertising<\/td>\n3,500<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Bad debts written off<\/td>\n416<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Plant & machinery at cost<\/td>\n125,000<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Provision for depreciation plant & machinery <\/td>\n\u00a0<\/td>\n36,000<\/td>\n<\/tr>\n
                  Motor vehicle at cost<\/td>\n41,000<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Provision for depreciation of motor vehicle<\/td>\n\u00a0<\/td>\n22,000<\/td>\n<\/tr>\n
                  \u00a0<\/td>\n\u00a0<\/td>\n18,000<\/td>\n<\/tr>\n
                  Trade debtors and creditors<\/td>\n45,750<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Provision for doubtful debts<\/td>\n\u00a0<\/td>\n1,000<\/td>\n<\/tr>\n
                  Bank balance<\/td>\n15,724<\/td>\n\u00a0<\/td>\n<\/tr>\n
                  Loan from Sam<\/td>\n\u00a0<\/td>\n60,000<\/td>\n<\/tr>\n
                  Capital a\/c – Sam
                  \n – Dan
                  \nCurrent a\/c – Sam
                  \n – Dan
                  \nDrawings a\/c – Sam
                  \n – Dan<\/td>\n                  		\n\u00a0
                  \n\u00a0
                  \n\u00a0
                  \n\u00a030,000
                  \n13,500<\/td>\n                  		50,000
                  \n40,000
                  \n7,000
                  \n3,000<\/td>\n<\/tr>\n
                  \u00a0<\/td>\n662,000<\/strong><\/td>\n662,000<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

                  \t\t\t\t\t\tAdditional Information
                  \n<\/strong><\/div>\n

                    \n
                  1. Stock at 30 April, 2011 is valued at N27,000\n<\/li>\n
                  2. Sam is to be credited with interest on the loan at a rate of 10% per annum.\n<\/li>\n
                  3. \n
                    The bank reconciliation shows that bank interest of N314 and bank charges of N860 have been debited in the bank statements. These amounts have not been entered in the cash book.\n<\/div>\n<\/li>\n
                  4. \n
                    On 30 April 2011, rent of N1,500 and advertising of N2,000 have been paid in advance.\n<\/div>\n<\/li>\n
                  5. \n
                    Depreciation is to be provided as follows:\n<\/div>\n
                      \n
                    1. \n
                      Plant and machinery 10% per annum on cost.\n<\/div>\n<\/li>\n
                    2. \n
                      Motor vehicles 20% per annum on their written down values.\n<\/div>\n<\/li>\n<\/ol>\n<\/li>\n
                    3. \n
                      The partners are to be charged interest on drawings and allowed interest on capital at a rate of 10% per annum.\n<\/div>\n<\/li>\n
                    4. \n
                      Partnership salaries are to be allowed as follows: Sam N10,000 per annum, Dan N8,000 per annum.\n<\/div>\n<\/li>\n
                    5. \n
                      The balance of profits and losses is to be shared as follows: Sam \u2013 3\/5; Dan 2\/5.\n<\/div>\n<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

                      Required:
                      \n<\/strong><\/p>\n

                        \n
                      1. \n
                        Prepare the partnership trading, profit and loss and appropriate accounts for the year ended 30 April 2011.\n<\/div>\n<\/li>\n
                      2. \n
                        Prepare the partners’ current accounts for the year ended 30 April 2011.\n<\/div>\n<\/li>\n
                      3. \n
                        Prepare the balance sheet as at 30 April 2011.\n<\/div>\n

                        \u00a0<\/li>\n

                      4. \n
                        Bose, Bukky and Biola are partners sharing profit and losses in ratio 3:2:1 respectively.\n<\/div>\n

                        The partners’ trial balance as at 31 December 2010 is as follows:<\/p>\n

                        \n\n\n\n\n
                        \u00a0<\/td>\nDr (N)<\/strong><\/td>\nCr (N)<\/strong><\/td>\n<\/tr>\n
                        Capital account<\/p>\n
                          \n
                        • \n
                          Bose\n<\/div>\n<\/li>\n
                        • \n
                          Bukky\n<\/div>\n<\/li>\n
                        • \n
                          Biola\n<\/div>\n<\/li>\n<\/ul>\n

                          Current account<\/p>\n

                            \n
                          • \n
                            Bose\n<\/div>\n<\/li>\n
                          • \n
                            Bukky\n<\/div>\n<\/li>\n
                          • \n
                            Biola\n<\/div>\n<\/li>\n<\/ul>\n

                            Premises
                            \nPlant
                            \nVehicles
                            \nFurniture
                            \nLoan \u2013 Biola
                            \nCreditors
                            \nStock
                            \nDebtors
                            \nBank\n<\/td>\n

                        		\n\u00a0
                        \n\u00a0
                        \n\u00a0
                        \n\u00a0
                        \n\u00a0
                        \n\u00a05,018<\/p>\n

                        \u00a0180,000
                        \n74,000
                        \n30,000
                        \n4,000<\/p>\n

                        \u00a0
                        \n\u00a0125,758
                        \n69,960<\/p>\n

                        \u00a0487,736<\/strong><\/td>\n

                        		\n\u00a0170,000
                        \n130,000
                        \n70,000<\/p>\n

                        \u00a07,428<\/p>\n

                        \u00a09,356<\/p>\n

                        \u00a0
                        \n\u00a0
                        \n\u00a0
                        \n\u00a056,000
                        \n38,072<\/p>\n

                        \u00a0
                        \n\u00a06,880
                        \n487,736<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

                        \u00a0<\/li>\n<\/ol>\n

                        Biola retires on 31 December 2010 and Shola was admitted as a partner on that date.<\/p>\n

                        \u00a0The following matters were agreed on:<\/p>\n

                          \n
                        1. \n
                          Assets revalued \u2013 premises N24,000 plant N60,000 and stock N108,358.\n<\/div>\n<\/li>\n
                        2. \n
                          Goodwill of N84,000 is to be recorded in the books on the day Biola retires.\n<\/div>\n<\/li>\n
                        3. \n
                          Provision is to be made for doubtful debts of N 6,000.\n<\/div>\n<\/li>\n
                        4. \n
                          The partners in the new firm do not wish to maintain goodwill account\n<\/div>\n<\/li>\n
                        5. \n
                          Bose and Bukky are to share profits in the same ration as earlier and Shola is to have the same share of profit as Bukky.\n<\/div>\n<\/li>\n
                        6. \n
                          Biola is to take over car at its book value of N7,800 in part payment and the balance of all she is owed by the firm in cash except N40,000 which she is willing to leave as a loan.\n<\/div>\n<\/li>\n
                        7. \n
                          The partners in the new firm are to start on an equal footing so far as capital and current accounts are concerned.\n<\/div>\n<\/li>\n
                        8. \n
                          Shola is to contribute cash to bring the capital and current accounts to the same amount as the original partner from the old firm who has the lower investment in the business.\n<\/div>\n<\/li>\n
                        9. \n
                          The original partner in the old firm who has the higher investment will draw out cash so that his capital and current account balances equal those of his new partners.\n<\/div>\n<\/li>\n<\/ol>\n

                          Required:
                          \n<\/strong><\/p>\n

                            \n
                          1. \n
                            Prepare account for the above transactions including goodwill and retiring partners account.\n<\/div>\n<\/li>\n
                          2. \n
                            Balance sheet of the new partnership of Bose, Bukky and Shola as at 31 December 2010.\n<\/div>\n<\/li>\n<\/ol>\n

                            \t\t\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

                            WEEK TWO – THREE ADMISSION OF NEW PARTNER AND RETIREMENT OF AN EXISTING PARTNER IN…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,194],"tags":[],"class_list":["post-2277","post","type-post","status-publish","format-standard","hentry","category-posts","category-second-term-ss1-accounting"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/comments?post=2277"}],"version-history":[{"count":2,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2277\/revisions"}],"predecessor-version":[{"id":2279,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/posts\/2277\/revisions\/2279"}],"wp:attachment":[{"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/media?parent=2277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/categories?post=2277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ecolebooks.com\/nigeria\/wp-json\/wp\/v2\/tags?post=2277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}