Principles of Accounting: Partnership Dissolution Solution to Example Question

////Principles of Accounting: Partnership Dissolution Solution to Example Question

Principles of Accounting: Partnership Dissolution Solution to Example Question

ZIMSEC O Level Principles of Accounting: Accounting for Partnerships: Partnership Dissolution Example

  • We looked at the basics of partnership dissolution here
  • We also posted an example question here
  • Now we will present the solution to that question

The realisation account

$Realisation Account$$
DetailsAmountDetailsAmount
Fixed Assets14 000Bank: Fixed Assets8 000
Inventory5 000Fixed Assets: Nkosi7 000
Receivables (Debtors)21 000Bank: Inventory4 000
Bank: Dissolution costs800Bank: Debtors3 000
discount Received500
Loss: Nkosi 9 150
Xo6 100
Zack

3 050

18 300

40 800

40 800

  • Debtors and Receivables are just one and the same thing
  • Creditors can also be referred to as Accounts Payable
  • Fixed Assets can also be called Non-current Assets
NkosiXoZackCapital AccountsNkosiXoZack
Details$$$Details$$$
Fixed Assets taken over7 000Balances b/d4 0004 0002 000
Loss shares9 1506 1003 050Shared Deficiency: Nkosi525
Deficiency525525Xo525
Amounts to be settled: Bank12 6752 625

16 675

6 625

3 050

16 675

6 625

3 050

$Bank$
DetailsAmountDetailsAmount
Realisation: Fixed Assets8 000Balance b/d13 000
Inventory4 000Creditors16 500
Trace Receivables3 000Realisation costs800
Capital: Nkosi12 675
Xo2 625

30 300

30 300

  • Since there is a deficit the two partners Nkosi and Xo have to fork out money from their own funds to settle the outstanding amount
  • In addition to the amount they owe these two partners have to cover Zack’s liability which they share according to their last known capital rations of 4 000: 4 000

To access more topics go to the Principles of Accounts Notes.

By |2018-04-20T10:18:16+00:00April 20th, 2018|Notes, Ordinary Level Notes, Principles of Accounts Notes|Comments Off on Principles of Accounting: Partnership Dissolution Solution to Example Question

About the Author:

He holds an Honours in Accountancy degree from the University of Zimbabwe. He is passionate about technology and its practical application in today's world.
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