Ado, Kola and Uju had been in partnership business sharing profit and loss in the ratio 2:1:2
respectively. Uju retired from the business on 31th July, 2023. Goodwill of the firm which was
valued at ₦50,000.00.
At 31st July, 2023, the statement of financial position of the firm was as follows:
Motor Vehicles 600,000.00
Furniture and Fittings 500,000.00
Land and Building 700,000.00
Trade Receivables 70,000.00
Cash at Bank 620,500.00 1,030,500.00
Uju 780,000.00 2,756,100.00
Trade Payables 62,800.00
Accruals 11,600.00 74,400.00
The assets of the firm were revalued at the following amounts:
Furniture and fittings ₦470,000.00, Motor vehicles ₦550,000.00, Land and building
₦720,000.00 and inventory ₦350,000.00.
Uju had agreed to accept a cheque on 1st August, 2023 for 40% of the amount due to him, while
the remaining 60% be transferred to a loan account to be paid in five equal yearly installments,
each instalment to include principal and interest on the outstanding balance at 8% per annum.
The first instalment being due one year after receipt of the cheque.
You are required to prepare:
i. Partners’ capital accounts, goodwill account, revaluation account and statement of
financial position of the firm immediately after Uju’s retirement.
ii. Loan account up to liquidation of the loan.?
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Asked by ZIK
on 15th August, 2023
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