Handie and Pattie have been in partnership for a number of years sharing profits (and losses) in…
Handie and Pattie have been in partnership for a number of years sharing profits (and losses) in the ratio 2:1. However, on 31 December 2021 they decided to dissolve their partnership to pursue other interests. The statement of financial position of the partnership at 31 December 2021 is given below: HANDIE AND PATTIE PARTNERSHIP STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2021ASSETS K’000 K’000 Non-current assets at NBV Equipment 8,000 Motor vehicles 12,000 ______ 20,000 Current assets Investments 20,000 Receivables 28,000 Bank 1,000 ______ 49,000 ______ Total Assets 69,000 _______ EQUITY AND LIABILITIES Equity Handie Pattie Total Capital accounts 20,000 14,000 34,000 Current accounts 8,000 5,000 13,000 ______ ______ ______ Total 28,000 19,000 47,000 ______ ______ Liabilities Payables 20,000 Loan from Lyndal 2,000 ______ Total Equity and Liabilities 69,000 ______At dissolution, it was agreed by the partners that Pattie could take some equipment, which had a net book value of K1 million at a valuation of K1.5 million. It was also agreed that Handie will take over responsibility for the loan from Lyndal (Handie will now be owing lyndal). Other equipment was sold for K6.6 million. All vehicles were sold for a total of K11 million. The receivables only realised K22.6 million and the payables were settled for K18,000,000 after a cash discount. The partners’ investments realised K26.8 million and there were dissolution expenses of K1 million. Required Show the relevant accounts and the final distribution between partners after the dissolution of the partnership. (Total 20 marks)Mar 12 2022 04:09 PM
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