Question

Partnerships (Question has been asked previously, please don't copy other experts answer)

Anna and Marie have been in a partnership as equal partners for 3 years. Despite trying their best to make the business work, they find they are unable to continue the business and will dissolve the partnership. As their accountant, you have been provided with the following information:

Capital account – Anna	150,000 Cr
Capital account – Marie	150,000 Cr
Bank (overdraft)	9,000 Cr
Accounts receivable	35,000 Dr
Inventory	48,000 Dr
Non-current assets	420,000 Dr
Accumulated depreciation (assets)	126,000 Cr
Accounts payable	68,000 Cr

Additional information

• The assets realised the following amounts: accounts receivable $32,500, inventory $42,500, and non-current assets $240,000.
• The cost of dissolving the partnership was $20,000.
• The partnership did not operate current accounts.

Task: Prepare journal entries to record the dissolution of the partnership. Narrations are required.

Answer 1

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