Question

Given information for questions 11 to 12:

Thabo and Zonke were in a partnership, trading as Nazo Flawless Professionals. The partners shared profits/losses in the ratio of 3:2 respectively. They agreed to admit Mkhaya as a partner with effect from 1 February 2020. It was decided that Mkhaya must contribute R150 000 in cash on 1 February 2020 for a 20% share in the fair value of the new partnership. Thabo and Zonke relinquished the 20% share to Mkhaya according to the ratio of 1:2 respectively.

The following trial balance relates to the partnership prior to any valuation adjustments:

NAZO FLAWLESS PROFESSIONALS

EXTRACT FROM TRIAL BALANCE AT 31 JANUARY 2020

	R
Capital: Thabo.........................................................................................................	288 000
Capital: Zonke.........................................................................................................	192 200
Current account: Thabo ..........................................................................................	9 000
Current account: Zonke (Dr) ...................................................................................	22 000
Furniture and equipment at carrying amount ..........................................................	105 000
Vehicles at carrying amount....................................................................................	315 000
Trade receivables control (Consulting fees) ...........................................................	82 500
Trade payables control ...........................................................................................	35 300

In preparation of the change in the ownership structure of the existing partnership, the following fair values regarding the assets thereof were obtained:

• Furniture and equipment, R167 500
• Vehicles, R304 500
• Consulting fees receivable, R76 500

The partners agreed that the partnership will trade under the name Mkhaya Nazo Flawless Professionals after the admission of Mkhaya.

QUESTION 11

Which one of the following alternatives represents the correct share of the valuation account balance at 31 January 2020 ?

1.     Thabo – R31 200; Zonke – R20 800

2.     Thabo – R23 000; Zonke – R18 400

3.     Thabo – R27 600; Zonke – R18 400

4.     Thabo – R18 400; Zonke – R27 600

QUESTION 12

Assume the share of valuation account for Zonke is R8 000 (valuation loss). Which one of the following alternatives represents the correct amount for goodwill acquired on admission of Mkhaya?

1.     R145 600

2.     R108 800

3.     R152 800

4.     R140 800

Answer 1

one question at a time please

answered by: anonymous