Partnership Account

On 01 January 2010, Den, Sam and Mac formed a partnership, sharing profits
and losses in the ratio 3:2:1.
The partnership Statement of Financial Position as at 31 March 2022 was as
follows:
$ $
Non-Current Assets
Property 165000
Machinery 50000
Goodwill 25000
240000
Current Assets
Inventory 52000
Trade receivables 28500
Cash at bank 15500
Cash in hand 1000

Total Assets 337000
Capital Accounts

Den 150000
Sam 90000
Mac 60000
300000
Current Accounts
Den 5600
Sam 4900
Mac 3200

Current Liabilities
Trade payables 23300
Total Liabilities 337000

On 01 April 2022, Mac retired from the partnership and on the same date, Den and
Sam decided to admit Ben to the partnership.
1. The following assets would be revalued:
i. Property $185000
ii. Inventory $48000
iii. Goodwill was revalued at $40000 but would not be retained in the new
partnership’s books.
2. Ben would pay in a cheque of $50000 as his capital.
3. An irrecoverable debt of $1300 was to be written off.
4. Mac would take over one of the machines at an agreed value of $9000. The
remaining machines were revalued at $29000.
5. It was agreed that of the final settlement due to Mac, $30000 would be paid from
the business bank account and the balance would remain in the business as a
long-term loan.
6. The new partnership would start on 01 April 2022 with Den, Sam and Ben
sharing profits and losses in the ratio 2:2:1.
Required:
a) Prepare the partnership Revaluation Account as at 01 April 2022 following the
amendments.
b) Prepare the partners’ Capital Accounts as at 01 April 2022.
c) Prepare the Statement of Financial Position as at 01 April 2022 following the
amendments.