Question

Given information for questions 5 to 7: Thula and Sizwe are in the business of renovating dilapidated buildings around Hillbrow. They are trading in a partnership named Thulasizwe Renovations with a profit sharing ratio of 3:2 respectively. They decided to admit Sethu from 1 July 2019 and the new partnership will trade under the new name Thulasizwe Sethu Renovations. 15

Question 5, 6 and 7

Answer 1

Solutions try . Profit loss made on valuation adjustments are as follows: 0 Vehicles with U23 vehicus at cost = 1,77,500 El Acumulated depositions ( 39,480) to con 1 July 2018) 6) Depreciation for the year 2 ( 42,000) 96, 020 en die But valuation made by independent appraiser showed 86,000. So, 10,0žo ( 96,020-86,000) is loss. 14000 - 2 121 furniture w & you 2 a same furniture at cost o (+) Aaunullated dep (on 1 July 2018 • (-) Depreciation for the year 2 1,75,200 W ( 39, 192) (42,300) 93,708 But valuation made by independant appraiser showed 2. So, 013420 (1.e. 1,07,128 - 93,708) 18 per Scanned_arith CamScanners 022

3) Inventory s h oot it became d more... Inventory shown in Ale is But valuation by independent 70,400 appraiser showed 62,000 so dyoo (ie 70,400- 62000) is loss. so Vehicle hurniture Inventory → - → 10,020 loss 13,420 Profit 8400 loss 5000 loss → Total Valuation adjustments so, option f is correct i.e. 25000 (Loss) Scanned with CamScanner

solution 6! Correct amount of goodwill acquired i mundo Capital Brought by Seller rengas . Vehicle 134,000 Byuipment : 34,000 Cash : 25,000 1993.000 v. Capital of Thula z 2 99400 - 181000 (21300) 7. Current Me Dr. - Capital of Siżue a 85000+ 42600 (2001) oooz 128.400 350 Current Afc Balance mete? Goodwilla Capitalization of fiom - (Total capital of firm t Reserves - Losses) Capitali zation Reciprocal of sh of firm z New capital X = 1,93000 x3 z 5,79.000 Total Capital: _ Scanned with CamScanner 1,93,000 + 78100 + 1,28,400 2 3,99 500

Joilla 5,79,000 - ( 3,990 F 90,000 - sooo) 2 5,79,000 - 4,84,520 2894,500 loss on valuation So option 3 is connect i.e. 294,ou as Scanned with CamScanner

solution 7: Sethu is admitted into partnership with Thula f sizwe reliquishing 1/3rd of profits/ losses in the ratio 6:4 respectively. s Given - 1 Thula & ratio sizwe 3:2 share profits/ losses in the calculation of Sethues share warnet hathangal ! 2 B from Thula . = B x I th ose - rhoda o^ 5 * from Sizwe = 4 x 2 do 3 15. Besedilo se Now Sethus share = 1 + 2 = 1 ors 15 3 JIS New share of Thula & Siowe will be d ont New sacrificed) Share Old share - New share 0 New share of Thula = 3 - de 2 or 161 ① New share of siewe - 2 1 1 So, new profit sharing ratio of . y. Tuula, sizwed settleb los com 3 64:5 (so conect option is optim no.2)