The document contains two questions regarding the dissolution of partnerships. Question 1 involves the dissolution of a partnership between Aminah, Badariah, and Dahlia. Upon dissolution, various partnership assets were sold or transferred to the partners. Dahlia was insolvent and unable to fully pay her capital account deficiency. Question 2 involves the dissolution of a partnership between Bedin, Ceyla, and Deris. Upon dissolution, partnership assets were sold or transferred to the partners. Deris was unable to fully pay his capital account deficiency based on the Garner vs Murray rule for distributing deficiencies.

1. 1
BKAF 3063 FINANCIAL ACCOUNTING & REPORTING III
TUTORIAL 5 : ACCOUNTING FOR PARTNERSHIP
SUBMISSION DATE: 16 NOVEMBER 2014
QUESTION 1
Aminah, Badariah and Dahlia are partners of an accounting firm, sharing profits and losses in the
ratio of 2:2:1, respectively. Due to some financial problems, they have decided to stop business
and the partnership is to be dissolved on I July 2013. The position of assets, liabilities and
equities immediately after the decision to dissolve is as shown below:
RM RM
Non-current assets
Free hold land
Motor Vehicles (cost)
Less: accumulated depreciation
Office building (cost)
Less: accumulated depreciation
Current assets
Inventories
Debtors
Current liabilities
Creditors
Bank Overdraft
Net current assets
Capital accounts:
Aminah
Badariah
Dahlia
Current accounts:
Aminah
Badariah
Dahlia
Non-current liabilities
Loan: Aminah
75,000
(30,000)
36,000
(10,000)
3,000
12,000
15,000
8,000
12,000
20,000
60,000
45,000
16,000
40,000
25,000
(40,000)
100,000
45,000
26,000
(5,000)
166,000
121,000
25,000
20,000
166,000

2. 2
Upon dissolution, the following took place:
(i) Land was sold for RM160,000 (market value). Aminah took over the office building
for RM18,000.
(ii) The partnership owned two cars, one car was taken over by Aminah at RM25,000
(net book value RM30,000) and the other one was sold at RM15,000. Badariah took
over the stock in hand at a discount of 10%.
(iii) All debtors settled their debts except for RM2,000 which the partners considered as
bad debts.
(iv) They paid RM500 in legal fees arising from the dissolution.
(v) The creditors agreed to accept RM7,600 as full payment for the amount due to them
and the loan from Aminah was fully settled.
(vi) All receipts and payments were made through the bank account and all the partners
settled their accounts except for Dahlia who was declared insolvent. She only
managed to pay RM1,000 and the deficiency in her capital account was borne by the
other solvent partners.
REQUIRED:
Prepare the following:
(a) Realisation account.
(b) Bank account
(c) Partners’ capital accounts.

3. 3
QUESTION 2
Bedin, Ceyla and Deris have been in a partnership for a number of years, sharing profits in the
ratio of 5:3:2, respectively. The statement of financial position of the business as at 31 December
2013 is as follows:
Statement of Financial Position
As at 31 December 2013
RM RM
ASSETS
Non-Current Assets
Premises 80,000
Equipment 50,000
Vehicles 30,000 160,000
Current Assets
Inventories 40,000
Debtors 50,000
Bank 112,000 202,000
TOTAL ASSETS 362,000
LIABILITIES & OWNERS EQUITY
Non-Current Liabilities
Loan from Bedin 8,000
Loan from Finance Company 20,000 28,000
Current Liabilities
Creditors 42,000
Bank Overdraft 32,000 74,000
Owners Equity
Capital Accounts
Bedin 160,000
Ceyla 60,000
Deris 20,000 240,000
Current Accounts
Bedin 10,000
Ceyla 4,000
Deris 6,000 20,000
TOTAL LIABILITIES & OWNERS EQUITY 362,000

4. 4
On 1 January 2014, the partnership was dissolved due to a disagreement between the partners.
Upon dissolution, the following transactions took place:
1. Premises were sold for RM115,000. The proceeds were then used to settle the bank overdraft.
Equipment was realised at a loss of RM10,000.
2. Bedin agreed to take over the vehicles at 20% below book value. The loan from Bedin to
the partnership was used as part of the settlement for the vehicles and the balance was paid
by cheque.
3. Deris took over the inventories at a discount of 10%.
4. All debtors paid their debts in full except for an amount of RM1,500 which was
unrecoverable and was therefore written off as bad debt.
5. The amounts owing to the creditors were paid in full at a discount of RM2,000.
6. Dissolution expenses amounting to RM1,500 were fully paid.
7. All payments and receipts were made through the bank account.
8. Deris had a debit balance in his capital account but only managed to pay RM4,400 to the
partnership business. The deficiency is to be borne between Bedin and Ceyla based on the
Garner vs. Murray rule.
REQUIRED:
(a) Prepare the realisation account to close the books of the partnership.
(b) Prepare the bank account to close the books of the partnership.
(c) Prepare the partners’ capital account to close the books of the partnership.