Andy, Bobby, and Catherine have been in partnership for some years. You have been hired as the bookkeeper of the business and are provided with the transactions of the business from 30 June 2015 till 30 June 2020 which can be found in the Appendix.
You are required to do the following tasks:
For the year ended 30 June 2015,
Prepare the statement of profit or loss and the statement ofthe partners’
appropriation.
Prepare the partners’ current accounts in columnar form.
Prepare the statement of financial position as at that date.
On 1 July 2015,
Prepare a revaluation account upon the retirement of Bobby.
Prepare a goodwill account upon the retirement of Bobby and admission of Kenny.
Prepare the capital accounts upon the retirement of Bobby and admission of Kenny.
Prepare the updated statement of financial position after the admission of Kenny as at 1 July 2015.
On 30 June 2020,
Prepare a realisation account upon partnership dissolution.
Prepare thepartners’ capital account whenpartnership ceases trading.
Prepare the bank account to dissolve the partnership business.
[50 marks] [14 marks] [20 marks]
[8 marks] [8 marks]
[13 marks] [13 marks]
[17 marks] [10marks] [7 marks] [ TOTAL 160 marks]
AF3211 FINANCIAL ACCOUNTING SCHOOL OF BUSINESS | POLITEKNIK BRUNEI ASSESSMENT DETAILS ASSESSMENT NO. 1 ASSESSMENT TITLE INDIVIDUAL ASSIGNMENT WEIGHTAGE 40% ACADEMIC SESSION SEMESTER 1 2020/2021 ISSUE DATE 13 JULY 2020 DUE DATE 7 SEPTEMBER 2020 ACADEMIC POLICY 1. It is the student’s responsibility to read the Level 5 Diploma Academic Policy and Procedures. 2. The student must submit assessment work and attend assessment events on the required dates and/or venue. 3. If the student is unable to meet the deadline, he/she must notify the module lecturer and offer an explanation together with supporting evidence, such as a Medical Certificate (MC). 4. If an acceptable explanation has been provided, an alternative assessment may be arranged. 5. Students who fail to submit their assignments/projects by the deadline will receive a penalty of deduction of ten percent (10%) of their marks per working day, if no valid explanation has been offered. 6. A student must not plagiarise or reproduce ideas, opinions, theories, formulas, graphics, or pictures of another person without acknowledgment. Plagiarism will be penalised with a nil mark. 7. A student who has been found or reported to make no contribution in the case of continuous group assessments will be penalised with a nil mark, at the module lecturer’s discretion. 8. Use a standard referencing system, such as the Harvard Referencing System, to properly acknowledge any information that you have used in preparing your assessment work. 1 SCHOOL OF BUSINESS | POLITEKNIK BRUNEI ASSESSMENT OBJECTIVES 1. Make the necessary adjustments to the given balance day adjustments. 2. Prepare the financial reports for a partnership. 3. Calculate the goodwill and the new profit-sharing ratios for admission of a new partner. 4. Prepare the revaluation, goodwill and capital accounts for retirement and admission of a new partner. 5. Prepare the statement of financial position after admission of a new partner. 6. Prepare the realisation, capital, and bank accounts upon dissolution of a partnership. INSTRUCTIONS Andy, Bobby, and Catherine have been in partnership for some years. You have been hired as the bookkeeper of the business and are provided with the transactions of the business from 30 June 2015 till 30 June 2020 which can be found in the Appendix. You are required to do the following tasks: For the year ended 30 June 2015, 1. Prepare the statement of profit or loss and the statement of the partners’ appropriation. [50 marks] 2. Prepare the partners’ current accounts in columnar form. [14 marks] 3. Prepare the statement of financial position as at that date. [20 marks] On 1 July 2015, 4. Prepare a revaluation account upon the retirement of Bobby. [8 marks] 5. Prepare a goodwill account upon the retirement of Bobby and admission of Kenny. [8 marks] 6. Prepare the capital accounts upon the retirement of Bobby and admission of Kenny. [13 marks] 7. Prepare the updated statement of financial position after the admission of Kenny as at 1 July 2015. [13 marks] On 30 June 2020, 8. Prepare a realisation account upon partnership dissolution. [17 marks] 9. Prepare the partners’ capital account when partnership ceases trading. [10marks] 10. Prepare the bank account to dissolve the partnership business. [7 marks] [ TOTAL 160 marks] 2 SCHOOL OF BUSINESS | POLITEKNIK BRUNEI SUBMISSION 1. The answer must be typed using “Arial” font, size 12. 2. A cover page is not required. Include the following details at the top of the first page of your report: AF3211 FINANCIAL ACCOUNTING INDIVIDUAL ASSIGNMENT PARTNERSHIPS NAME: STUDENT ID: PROGRAMME: DIPLOMA IN BUSINESS ACCOUNTING AND FINANCE GROUP: [DBAF11 or DBAF12] MODULE LECTURER: EMILY TAN PHEK SUAN 3. The submission of your work must be done in hard copy by 12 noon on Monday, 07 September 2020. 4. This assessment constitutes 40% of the overall grade for the module. APPENDIX BUSINESS INFORMATION AND TRANSACTIONS 3 SCHOOL OF BUSINESS | POLITEKNIK BRUNEI Andy, Bobby, and Catherine share profits and losses in the ratios 5: 3: 2 respectively. Their trial balance as at 30 June 2015 was as follows: Dr ($) Cr ($) Sales 4 257 000 Returns inwards 122 400 Purchases 2 469 420 Returns outwards 90 000 Carriage expenses 108 000 Inventory 30 June 2014 771 300 Insurance 172 800 Discounts allowed 1 980 Discounts received 18 000 Salaries and wages 323 328 Interest on loan from Bobby 14 400 Interest received from fixed deposit 36 000 Bad debts 22 212 Provision for doubtful debts 30.6.2014 14 400 General expenses 17 010 Rent and rates 46 170 Postages 44 100 Motor expenses 340 920 Rent receivable 86 400 Motor vehicles at cost 495 000 Office equipment at cost 151 200 Provisions for depreciation at 30.6.2014: Motor vehicles Office equipment 207 000 48 600 10% Fixed Deposit at International Bank (3-year investment mature in June 2016) 450 000 Trade payables 438 408 Trade receivables 723 204 Cash at bank 62 820 Cash in hand 24 768 Loan from Bobby 540 000 Partners’ salaries: Bobby Catherine 54 000 54 000 Drawings: Andy Bobby Catherine 226 980 153 072 117 600 Current accounts: Andy Bobby Catherine 2 754 26 280 37 710 APPENDIX BUSINESS INFORMATION AND TRANSACTIONS 4 SCHOOL OF BUSINESS | POLITEKNIK BRUNEI Capital accounts: Andy Bobby Catherine 540 000 288 000 216 000 6 906 618 6 906 618 The following notes and adjustments are relevant as at 30 June 2015: i. Inventory have been valued at cost at $919 080 on 30 June 2015. Included in this valuation are some items which originally cost $90 000 but have been damaged. They would normally sell for $180 000. The items could be repaired at a cost of $46 080 and then sold for $117 000. ii. The accounts for the year ended 30 June 2014 included inventory at 30 June 2014 in the sum of $180 000. The correct value of the inventory should have been 1.25 times the incorrect value. The partners have agreed that this error should be corrected in the partnership accounts. iii. Andy has taken goods costing $39 420 during the year for personal use and this had not been recorded in the books. iv. During the year, Bobby has renovated part of his private premises. The labour cost of renovating the premises, $5 328, has been entered in salaries and wages account. v. Catherine’s son worked temporarily in the business for two months and was paid a salary of $6 000. This amount is wrongly charged to drawings. vi. Sales include goods sent on a sale or return to a customer who has not yet indicated acceptance of the goods. The goods cost $45 000 and the customer has been invoiced an amount of $72 000. vii. It has been found out that two-third of the carriage expenses is for carriage of goods from suppliers. viii. Rates of $1 080 has not been paid for the current year; stock of postage stamps $1 800. ix. The payment for insurance has been made on 15 January 2015 covering the period from 1 February 2015 till 31 October 2015. x. The partnership rented out part of the premises on 1 December 2014. Rent receivable represents 8-months rental. xi. Goods with a cost price of $40 963.20 had been sold at a margin of 20%. The customer who had purchased these goods has been declared bankrupt and the debt is to be written off. The provision for doubtful debts is to be set at the rate of 3% on balance on trade receivables at year-end. xii. A bad debt of $48 000 written off in the year ended 30 June 2014 was partially recovered. The trade receivable was paid, by cheque, $0.75 for each $1 owed. No entries had been made for the cheque received in the books of account. xiii. The loan from Bobby had been obtained on 1 November 2014 with an interest of 7.5% per annum. xiv. The bank reconciliation shows that bank interest of $1 584 and bank charges of