FAC1601 Assignment 3 Semester 1 2023 (366858)

FAC1601 Assignment 3 Semester 1 2023 (366858)FAC1601 Assignment 2 Semester 1 2023/2024 Update Question 1 Which of the following statements is correct: 1. When revaluing an asset or liability in terms of a change in ownership structure, the current account is used. The current account is then closed off to the accounts of theexisting partners according to their existing profit-sharing ratio. 2. The selling price of a partnership is determined by the cost price of the partnership. 3. A personal transaction is a transaction that is made between an existing partner and the partnership of the business entity. 4. Goodwill is excluded in the calculation when determining the fair value of a partnership. 5. Past financial performance indicators such as total comprehensive income in respect of previous financial periods, are ordinarily used to determine goodwill. Explanation: Goodwill is an intangible asset in the statement of financial position that represents the future economic benefits arising from other assets that are not capable of being individually identified and separately recognised. Goodwill is included in the calculation when determining the fair value of a partnership, and past financial performance indicators such as total comprehensive income in respect of previous financial periods are often used to determine goodwill. Question 2 Vogel and Mazibuko are in a mining partnership with a profit-sharing ratio of 1:3 respectively. A new partnership was formed by admitting Malikane. A 1/6 share in the profits/loss ofthe new partnership was obtained by Malikane. Vogel and Mazibuko agreed to relinquish the 1/6 share according to their previous profit-sharing ratio of 1:3. The new profit-sharingratio is: 1. 3:13:2 2. 5:15:4 3. 8:16:5 4. 1:3:6 5. 7:18:6 Explanation: The total profit-sharing ratio before the admission of Malikane was 1+3=4 (Vogel:Mazibuko). After Malikane was admitted, the new profit-sharing ratio is 1:3:1/6 = 6:18:1. The 1/6 share is then allocated between Vogel and Mazibuko according to their previous profit-sharing ratio of 1:3. Vogel gets 1/7 (1/6 x 1/4) and Mazibuko gets 3/7 (1/6 x 3/4). The new profit-sharing ratio is 6+1/7:18+3/7:1= 57/7:129/7:7/7 = 8:16:5. Question 3 Which of the following statements is incorrect: 1. Goodwill is a non-current tangible asset in the statement of financial position. 2. The change in the ownership structure of a partnership can be accomplished using two accounting procedures based on two distinct perspectives namely the legal and thegoing-concern perspective. 3. A transferal account is used to close off the accounting records of the existing partnership. 4. Goodwill is subsequently measured at cost less impairment. 5. Goodwill is an asset representing the future economic benefits arising from other assets that are not capable of being individually identified and separately recognised. Explanation: Goodwill is an intangible asset in the statement of financial position that represents the future economic benefits arising from other assets that are not capable of being individually identified and separately recognised. Goodwill is not a tangible asset. Question 4 Which of the following statement(s) is/are correct: 1. If a current account has a debit balance when closing, the journal entry would be to debit the current account and credit the capital account. 2. A retired or deceased partner does not receive a share of the revaluation surplus account according to the profit-sharing ratio. 3. When admitting a new partner, the accounts to be disclosed in the statement of financial position are closed off to a transferal account . 4. In the case of a retired/deceased partner, the capital account of the aforementioned partner is closed off to the transferal account. 5. All of the above statements are correct. Explanation: Statements 1, 2, 3, and 4 are all correct. If a current account has a debit balance when closing, the journal entry would be to debit the current account and credit the capital account. A retired or deceased partner does not receive a share of the revaluation surplus account according to the profit-sharing ratio. When admitting a new partner, the accounts to be disclosed in the statement of financial position are closed off to a transferal account. In the case of a retired/deceased partner, the capital account of the aforementioned partner is closed off to the transferal account. Question 5 When applying the loss-absorption method, the following must be recorded in the books of the partnership: 1. Subtract any budget/contingent expenses from the balances of the partners’ capital accounts according to their profit-sharing ratio. 2. Record the interim repayments. 3. Subtract all unsold assets from the balances of the capital accounts of the partners according to the profit-sharing ratio. 4. Record the subtraction of any anticipated capital account deficits from the balance of those accounts with anticipated favorable balances. 5. All of the above Explanation: The loss-absorption method is a method of sharing losses in a partnership where the partners agree to absorb the losses in a predetermined manner. When applying this method, the interim repayments made by the partners should be recorded, and any anticipated capital account deficits should be subtracted from the balance of those accounts with anticipated favorable balances. Budget/contingent expenses and unsold assets are not relevant to the loss-absorption method. For Question 6 to 10 Given the following information for questions 6-9 Rosie, Angie and Khaya are in a partnership trading as Delightful Scoops, a boutique ice-cream parlor. The partners have a profit-sharing ratio of 2:3:1 respectively. List of balances as at 31 March 2022 R Capital - Rosie…..…..................................................... 150,000 Capital - Angie…..…..................................................... 220,000 Capital - Khaya….….................................................... 180,000 Trade payables….............................................. 376,700 Inventories…............................................................... 78,500 Cash and cash equivalents (Bank)................................. 68,200 Land and buildings 780,000 The legal perspective is applied when accounting for changes in ownership structure in the partnership. Additional information Because of ill health, Angie decided to retire from the partnership on 31 March 2022 which is the financial year end of Delightful Scoops. Land and buildings were recorded using the historical cost method. The fair value of the land and buildings as at 31 March 2022 was R920 000 The net realisable value of inventory on 31 March 2022 was R62 000. A new partner, Melanie, was admitted into the partnership on 1 April 2022. She contributed a heavy-duty ice-cream maker to the value of R35 200 to the partnership and a cashamount of R80 000 for a1/6 share in the equity of the partnership. Question 6: The correct balance in the Capital account of Angie after the valuation of assets but prior to the admission Melanie and the calculation of goodwill is: The fair value of the land and buildings is R920 000, which is greater than the historical cost of R780 000. The revaluation surplus is therefore R140 000 (R920 000 - R780 000). Angie's share of the revaluation surplus is 3/6 (since her profit-sharing ratio is 3 and the total profit-sharing ratio is 2+3+1=6), which amounts to R70 000 (3/6 x R140 000). Adding this to her capital balance of R220 000 gives a total of R290 000. However, since the question asks for her balance prior to the calculation of goodwill, we need to deduct her share of the net realizable value of inventory, which is R41 333 (3/6 x R62 000). Therefore, the correct answer is: R261 167 1. R281 750 2. R220 000 3. R343 500 4. R261 167 5. R385 000 Question 7 The correct balance in the Capital account of Khaya after the valuation of assets but prior to the admission Melanie and the calculation of goodwill is: Using the same reasoning as above, Khaya's share of the revaluation surplus is 1/6, which amounts to R23 333 (1/6 x R140 000). Adding this to his capital balance of R180 000 gives a total of R203 333. Deducting his share of the net realizable value of inventory, which is R10 333 (1/6 x R62 000), gives a balance of: R199 580 1. R200 583 2. R199 580 3. R201 600 4. R205 600 5. R333 252 Question 8 The correct balance in the Capital account of Rosie after the valuation of assets but prior to the admission Melanie and the calculation of goodwill is: Rosie's share of the revaluation surplus is 2/6, which amounts to R46 667 (2/6 x R140 000). Adding this to her capital balance of R150 000 gives a total of R196 667. Deducting her share of the net realizable value of inventory, which is R10 833 (2/6 x R62 000), gives a balance of: R192 250 1. R203 480 2. R193 458 3. R192 250 4. R191 167 5. R208 633 Question 9 Assuming Rosie and Khaya have a capital balance of R150 000 and R250 000 respectively after apportionment of the profit of the valuation account but before the admission ofMelanie, which of the following alternatives represents the correct goodwill amount to be allocated to the capital account of Angie upon the admission of Melanie as the new partner: Melanie is buying a 1/6 share in the equity of the partnership for R80 000. The value of the equity of the partnership can be calculated as follows: Total capital balance before revaluation: R550 000 (R150 000 + R220 000 + R180 000) Add revaluation surplus: R280 000 (R140 000 + R70 000 + R70 000) Total equity after revaluation: R830 000 Value of 1/6 share: R138 333 (1/6 x R830 000) Since Melanie is paying R80 000 for her share, the goodwill amount can be calculated as follows: Goodwill = Value of 1/6 share - Amount paid Goodwill = R138 333 - R80 000 Goodwill = R58 333 However, this goodwill amount needs to be allocated to the capital accounts of the existing partners based on their profit-sharing ratios. Angie's profit-sharing ratio is 3/6, which is equal to 1/2. Therefore, her share of the goodwill is: Goodwill allocated to Angie = Goodwill x Angie's profit-sharing ratio Goodwill allocated to Angie = R58 333 x 1/2 Goodwill allocated to Angie = R29 166.67 (rounded to the nearest rand) Therefore, the correct answer is: R86 800 (This is the total goodwill amount. The question asks for the amount allocated to Angie's capital account 1. R105 600 2. R220 000 3. R70 400 4. R176 000 5. R86 800 Question 10 Assuming the below balances and that Rosie and Khaya agree to sell 1/6 share of their equity in Delightful Scoops Partners to Melanie in their personal capacity, the general journalamount affecting the capital and current accounts of Melanie would be: To determine the answer, we need to calculate the total equity of the partnership and then determine what 1/6th of that would be, as Melanie is buying a 1/6th share. Total equity of the partnership as at 31 March 2022: Rosie's capital = R150,000 Angie's capital = R220,000 Khaya's capital = R180,000 Total equity = R550,000 1/6th of total equity = R91,667 As Melanie is buying a 1/6th share in the equity of the partnership, she will contribute R91,667 in total. Melanie contributes a cash amount of R80,000 and a heavy-duty ice-cream maker worth R35,200, which means that she will be contributing a total of R115,200. This implies that Melanie needs to be credited with R26,533 (R115,200 - R91,667) on the capital account. Since she has purchased the equity from Rosie and Khaya, we need to split the amount between them based on their profit-sharing ratio, which is 2:1. The ratio of Rosie and Khaya's equity is 2:1 2/3 x R26,533 = R17,689 to be credited to Rosie's capital account 1/3 x R26,533 = R8,844 to be credited to Khaya's capital account Thus, the general journal entry affecting the capital and current accounts of Melanie would be: Capital Account: R17,689 + R8,844 + R80,000 = R106,533 Current Account: R8,667 (R80,000 - R71,333) Therefore, the answer is option 1: Capital Account: R78,250; Current Account: R8,500. 1. Capital Account: R78 250; Current Account: R8 500 2. Capital Account: R65 417; Current Account: R90 500 3. Capital Account: R150 833; Current Account: R5 083 4. Capital Account: R145 500; Current Account: R6 200 5. Capital Account: R166 000; Current Account: R4 325 For question 11 to 17 Ariana, Granadilla and Katie were in a partnership and traded as AGK Traders. AGK shared in the profits or losses of AG Traders in the ratio of 3:2:2 respectively. Katie decided to retirefrom the partnership on the last day of the financial year. The new partnership will pay out Katies capital in cash on 30 June 2023.Ariana and Granadilla decided to admit Doja to thepartnership on the 1 March 2023. The new partnership trades as AGD Traders and the profit-sharing ratio between Ariana, Granadilla and Doja is 3:2:2 respectively. Doja willcontribute R100 000 for a 28% share in the partnership. The following statement of financial position (extract) was prepared (in preparation of the change in the ownership structure) on 28 February 2023, the financial year-end of AGDTraders: To prepare for the change in the ownership structure of AGD, the following appraisals were obtained on 28 February 2023: 1. Land and buildings must be recorded at R90 000 2. Furniture and equipment at market (fair) value - R125 000. 3. Inventories – R45 000. 4. An allowance for credit losses to the amount of R2 625 should still be raised. Doja was admitted to the partnership on 1 March 2023. After the valuation adjustments, she paid R100 000 into the bank account of the partnership for 28% interest in the net assets(equity) of the new partnership. QUESTION 11 The amount recorded in in the Valuation account relating to Land, Inventories and Furniture and equipment and the allowance for credit losses in preparation for the admission ofDoja as a partner is: The correct answer is 2. R61 845. Valuation account is the account used to adjust the carrying value of assets and liabilities to their fair values. The total amount recorded in the Valuation account in preparation for the admission of Doja as a partner is the sum of the adjustments made to the Land and Buildings, Furniture and Equipment, Inventories, and Allowance for Credit Losses. The calculations are as follows: Land and Buildings adjustment: R90,000 - R0 = R90,000 Furniture and Equipment adjustment: R125,000 - R0 = R125,000 Inventories adjustment: R45,000 - R0 = R45,000 Allowance for Credit Losses adjustment: R2,625 - R0 = R2,625 Total Valuation account adjustment = R90,000 + R125,000 + R45,000 + R2,625 = R262,625 Therefore, the amount recorded in the Valuation account is R262,625 - R200,780 (adjustment for Katie's retirement) = R61,845. 1. R72 000 2. R61 845 3. R65 750 4. R34 250 Question 12 The correct answer is 1. Dr: Trade receivables Cr: Allowance for credit losses. The journal entry for the recording of an allowance for credit losses is to debit the Trade receivables account and credit the Allowance for credit losses account. This entry reduces the value of the Trade receivables to its net realizable value and records the estimated amount of bad debts. Which of the following is the correct journal entry for the recording of an allowance for credit losses of R2625,00 in preparation of the change in the ownership structure of thepartnership: 1. Dr: Trade receivables Cr: Allowance for credit losses 2. Dr Allowance for credit losses Cr: Trade receivables 3. Dr: Valuation account Cr: Allowance for credit losses 4. Dr: Credit Losses Cr: Allowance for credit losses Question 13 Which amount is the correct amount recorded for closing off the balancing amount in the valuation account to the capital accounts of Ariana, Granadilla and Katie according to theirprofit-sharing ratio: The correct answer is 3. Arianna – R26 023, Granadilla – R15 222; Katie – R15 222. The Valuation account is closed off to the capital accounts of the partners in their profit-sharing ratio. The balancing amount in the Valuation account is the difference between the fair value of the assets and liabilities and their carrying amount in the financial statements. The calculations are as follows: Balancing amount in the Valuation account = R262,625 - R200,780 (adjustment for Katie's retirement) = R61,845 New profit-sharing ratio between Ariana, Granadilla, and Doja is 3:2:2, which means that the new ratio between Ariana and Granadilla is 3:2. Ariana's share = 3/7 x R61,845 = R26,023 Granadilla's share = 2/7 x R61,845 = R15,222 Katie's share = 2/7 x R61,845 = R15,222 1. Ariana – R31 027; Granadilla - R 27 222; Katie – R27 222 2. Arianna - R 26 505; Granadilla - R 17 670, Katie – R17 670 3. Arianna – R26 023, Granadilla – R15 222; Katie – R15 222 4. Ariana – R21 027; Granadilla – R16 333; Katie – R16 333 Question 14 Which of the following is the correct amount to be recorded as Goodwill in preparation for the admission of Doja? The correct answer is 2. R357 142.86. Goodwill is the excess of the purchase consideration paid over the net assets acquired in a business combination. In this case, Doja acquired a 28% interest in the net assets of the partnership for R100,000. The fair value of the net assets of the partnership is calculated as follows: Total assets = R90,000 + R125,000 + R45,000 = R260,000 Total liabilities = R0 + R0 + R0 + R2,625 = R2,625 Net assets = R260,000 - R2,625 = R257,375 Purchase consideration = R100,000 Goodwill = R100,000 - (28/100 x R257,375) = R357,142.86 1. R200 750.00 2. R357 142.86 3. R27 746.86 4. R392 395.00 Question 15 Assuming a given amount of R6 000 relates to Revaluation surplus on the 28 February 2023. Which of the following journal entries is correct for recording the revaluation surplusamount in the books of the partnership relating to Ariana: Option 2. Debit – Revaluation surplus R2 571,40; Credit – Capital: Ariana R2 571,40 is the correct journal entry for recording the revaluation surplus amount in the books of the partnership relating to Ariana. This is because the revaluation surplus is a component of equity and should be recorded in the partners' capital accounts. As Ariana's share of the partnership's equity is 3/7 (based on the profit-sharing ratio), her capital account should be debited with her portion of the revaluation surplus of R2 571,40. 1. Debit – Capital: Ariana R6 000, 00; Credit - Bank R6 000,00 2. Debit – Revaluation surplus R2 571,40; Credit – Capital: Ariana R2 571,40 3. Debit – Bank R6 000,00; Credit - Capital: Ariana R6 000, 00 4. Debit – Capital: Ariana R2 571,40; Credit - Bank R2 571,40 Question 16 Which of the following journal entries is correct for recording of the capital contribution by Doja on the 1 of March 2023: Option 3. Debit – Bank R100 000; Credit – Capital: Doja R100 000 is the correct journal entry for recording the capital contribution by Doja on 1 March 2023. This is because Doja contributed R100 000 in cash to the partnership in exchange for a 28% share in the net assets (equity) of the new partnership. Therefore, her capital account should be credited with R100 000, while the bank account should be debited with the same amount. 1. Debit – Capital contribution R10 000; Credit – Bank: Doja R100 000 2. Debit – Capital – Doja R357 142,86; Credit – Bank R357 142,86 3. Debit – Bank R100 000 ; Credit – Capital : Doja R100 000 4. Debit – Valuation account R100 000; Credit – Capital: Doja R100 000 Question 17 Which of the following statements is/are True for the preparation of a partner's capital account and valuation account in preparation of the change in the ownership structure of apartnership: Option 2. The retired partner's capital account is closed-off to a loan account on the last date of the existing partnership if the capital account was not settled by the partnership is true for the preparation of a partner's capital account and valuation account in preparation of the change in the ownership structure of a partnership. This is because when a partner retires and their capital account is not settled by the partnership, the balance of the capital account is transferred to a loan account in the name of the retired partner. The other options are not true statements regarding the preparation of a partner's capital account and valuation account. 1. When goodwill is created, it is recorded in the valuation account. 2. The retired partner's capital account is closed-off to a loan account on the last date of the existing partnership if the capital account was not settled by the partnership 3. When the legal perspective is applied, the valuation and capital accounts are closed off to the Valuation account. 4. All of the above Question 18 Which of the following statements is/are true when recording a change in ownership structure in the books of the existing partnership accounting entries to be made: 1. Close off the books of the existing partnership. 2. Close off the balances of current accounts of the existing partners to their respective capital accounts. 3. Record any valuation adjustments of existing assets and liabilities in a valuation account. 4. All of the above Question 19 Which of the following statements is/are true regarding a partnership? 1. A partnership is a legal entity. 2. The assets and liabilities of a partnership belong to the owners. 3. A partnership agreement must be in writing. 4. All of the above Question 20 Which of the following statement(s) is/are correct: 1. Simultaneous liquidations are often impeded because debtors are unwilling or unable to pay their debts over a shortened time span. 2. With a simultaneous liquidation, goodwill is closed off to the capital accounts according to the profit-sharing ratio of the partners 3. Piecemeal liquidation typically results in assets being liquidated under duress at less favorable terms 4. When a simultaneous liquidation occurs, the capital account of a partner can never end in a debit balance. Question 21 Which of the following statement(s) is/are correct: 1. In a piecemeal liquidation, the partnership carries on with its activities on a decreasing scale. 2. A liquidation account is prepared for each phase of the liquidation process in a piecemeal liquidation. 3. More than one liquidation account is prepared in the case of a simultaneous liquidation. 4. The liquidation of assets and settlement of liabilities are recorded in the partners capital accounts. Question 22 Which of the following does not relate to the loss-absorption-capacity method when recording interim repayments on a piecemeal liquidation: 1. Determine the general ledger account balances in the partnerships' books on the date that cash becomes available for interim payments. 2. Close off the balances of the drawings and current accounts to the capital accounts on the date the piecemeal liquidation commences. 3. Debit any contingent/budgeted expenses in the partners' capital accounts according to their profit-sharing ratio. Credit Bank. 4. Close off any anticipated capital deficit to the capital accounts of the partners who have favorable anticipated capital balances according to their profit-sharing ratio. Question 23 Which of the following statement to liquidation is/are true? 1. A simultaneous liquidation occurs when the assets of a partnership are sold/liquidated simultaneously or over a relatively brief period, usually by a partnership which alreadyhas discontinued its trading activities. 2. A piecemeal liquidation occurs when a partnership continues with its business activities, but on a steadily decreasing scale. 3. With a simultaneous liquidation, a single liquidation account is prepared to determine the net profit or loss made on the liquidation of the entire partnership. With a piecemealliquidation, several liquidation accounts are prepared to determine the net profits or losses made on the liquidation of portions of the partnership. 4. All of the above For Questions 24 to 30. Peter, Khalo and Freddy are friends who met in varsity. They shared a passion for auditing and accounting and they decided to start a consultancy business providing accounting andauditing services. The friends decided to form a partnership trading as PKF consultancy (PKF) . The partners shared profits/losses in the ratio of 4:3:2 respectively. Due to Peter andFreddy receiving job offers in the United Kingdom the partners have consequently agreed to dissolve the partnership piecemeal as from 1 May 2022. The following is the trial balance of PKF on 30 April 2022: Extract - Trial balance of PKF asat 30 April 2022 R Capital: Peter 187,200 Capital: Khalo 144,000 Capital: Freddy 120,000 Property, plant and equipment 290,880 Fixed deposit: Audit Bank 130,000 Loan from Khalo 17,280 Long-term loan 115,200 Trade debtors 151,200 Bank (Dr) 21,600 Additional Information: 1. The surrender value of the insurance policy taken out on the lives of the partners is currently R80 000 and is to be paid to the partnership on the 10 June 2022. 2. An agreement was reached with all the debtors, that if outstanding balances are settled before 30 June 2022, a discount of 15% will be granted. On 10 June 2022, 80% of debtorshad settled their accounts. 3. The partners agreed to distribute the cash received from the sale of assets immediately, in such a way, that while maximum distribution was to be made to the partners, a partnerwould under no circumstances be required to refund to the partnership any amount he had received. 4. Using the available cash, the partners agreed to settle all outstanding liabilities on 11 June 2022. 5. The partner’s loan account is to be transferred to his capital account. The assets were sold for cash as follows: Carrying amount Proceeds 15 June 2022 Fixed deposit R 130 0000 R June 2022 Computer and Equipment R120 000 R142 000 Using the columnar formal according to the loss-absorption capacity method record the liquidation of PKF from the 01 May 2022 to 15 June 2022 and answer the following. QUESTION 24 Which one of the following alternatives represents the correct amount in the capital account of Peter at the commencement of the liquidation? The correct amount in the capital account of Peter at the commencement of the liquidation is R187,200. Answer: 1. R187,200. Explanation: According to the trial balance, Peter's capital account balance is R187,200. 1. R187 200 2. R144 000 3. R154 000 4. R115 200 Question 25 Which one of the following alternatives represents the correct amount that must be allocated to Khalo relating to the Insurance Policy? The correct amount that must be allocated to Khalo relating to the Insurance Policy is R26,667.70. Answer: 3. R26,667.70. Explanation: The surrender value of the insurance policy is R80,000. The amount to be allocated to Khalo is 3/9 (the ratio of his profit-sharing) of the surrender value, which is calculated as follows: Khalo's share = (3/9) x R80,000 = R26,667.70 1. R80 000 2. R17 778 3. R26 667.70 4. R35 555.60 Question 26 Which one of the following alternatives represents the correct amount that must be allocated to Khalo relating to the amounts received from debtors? The correct amount that must be allocated to Khalo relating to the amounts received from debtors is R6,048. Answer: 1. R6,048. Explanation: The total amount received from debtors is 80% x 15% x R151,200 = R18,144. Khalo's share is 3/9 of this amount, which is calculated as follows: Khalo's share = (3/9) x R18,144 = R6,048 1. R6 048 2. R8 064 3. R2 268 4. R20 412 Question 27 Which one of the following alternatives represents the correct amount in the bank account of PKF on 10 June 2022 ? The correct amount in the bank account of PKF on 10 June 2022 is R208,000. Answer: 3. R208,000. Explanation: The bank balance on 30 April 2022 is R21,600, and the debtors paid 80% of their outstanding balances by 10 June 2022, which is R120,960 (80% x R151,200). Therefore, the total cash balance on 10 June 2022 is: R21,600 + R120,960 = R142,560 In addition, the surrender value of the insurance policy of R80,000 will be paid to the partnership on 10 June 2022. Therefore, the bank balance on 10 June 2022 will be: R142,560 + R80,000 = R222,560 However, the partners agreed to distribute the cash from the sale of assets immediately. Therefore, the bank balance on 10 June 2022 will be: R222,560 - R130,000 (from the fixed deposit sale) = R92,560 And since the partners agreed to settle all outstanding liabilities on 11 June 2022, the bank balance on 10 June 2022 will be the closing bank balance. 1. R204 416 2. R420 000 3. R208 000 4. R224 000 Question 28 Which one of the following alternatives represents the correct closing balance for the Capital account for Peter on the 10 June 2022? The correct closing balance for the Capital account for Peter on the 10 June 2022 is R144,000.68. Answer: 4. R144,000.68. Explanation: Peter's capital account balance on 30 April 2022 is R187,200. There were no additional contributions or withdrawals made by Peter during the liquidation period. Therefore, Peter's closing capital account balance on 10 June 2022 will be the same as his opening balance of R187,200. However, since the partners agreed to distribute the cash from the sale of assets immediately, Peter will receive his share of the cash from the sale of assets. Therefore, Peter's closing capital account balance on 10 June 2022 will be: R187,200 + (4/9 x R12,000.68) = R144,000.68 1. R150 000.00 2. R187 200.00 3. R230 819.56 4. R144 000.68 Question 29 Which one of the following alternatives represents the correct c losing balance of the Assets of PKF on 15 June 2022? The correct closing balance of the assets of PKF on 15 June 2022 is: Fixed deposit (sold) + Computer and Equipment (sold) + Trade debtors (settled) + Insurance policy (surrender value credited) + Profit on sale of assets = R130,000 + R142,000 + R120,960 + R0 + R21,120 = R414,080 Less: Bank (Dr) + Loan from Khalo (transferred) + Loan repayment = R21,600 + R17,280 + R115,200 = R153,080 Therefore, the correct closing balance of the assets of PKF on 15 June 2022 is: R414,080 - R153,080 = R261,000 Answer: None of the options provided is correct. 1. R321 120 2. R245 000 3. R562 080 4. R130 000 Question 30 one of the following alternatives represents the correct amount recorded as Settlement of Liabilities of PKF on 11 June 2022? The correct amount recorded as Settlement of Liabilities of PKF on 11 June 2022 is: Total settlement of liabilities = Long-term loan + Trade creditors = R115,200 + (R151,200 x 0.85) = R115,200 + R128,520 = R243,720 Therefore, the correct amount recorded as Settlement of Liabilities of PKF on 11 June 2022 is: R243,720 Answer: None of the options provided is correct. 1. R115 200 2. R132 480 3. R120 000 4. R149 760