Q #3
Ali and Siri are in business sharing the profits and losses equally. Their statement of financial position at 31
October 2016 is as follows:
Statement of financial position at 31 October 2016
$000
Non-current assets:
Property
40
Motor vehicles
20
60
Current assets:
Inventory
12
Trade receivables
10
Total assets
82
Capital and liabilities:
Capital accounts:
22
Ali
36
IN
Siri
36
72
Current liabilities:
Trade payables
8
Bank overdraft
2
10
Total capital and liabilities
82
The partners did not operate current accounts.
Additional information:
1 On 1 November 2016 they admit Fiona as a partner, taking an equal share of the profits.
2 Fiona will pay $30 000 into the bank as her capital.
3 The goodwill is valued at $24 000. No goodwill account is to appear in the books.
Ali and Sir also revalue the assets at the same date. The property is revalued at $60 000 and the
inventory revalued at $10 000.
Required:
(a) Prepare the following:
(1) revaluation account
(ii) partners' capital accounts
(b) Statement of financial position
4