Ebubechukwu, Biakenechukwu and Kenechukwu have been partners for over two decades. They share profits or losses in the ratio 5:4:1. The partnership prepares its financial statements to 31 December every year. Two months to the financial year end of the partnership, the partners decided to cease business. The assets are to be realised, outstanding debts paid and the remainder is to be shared by the partners equitably. Cash distributions were to be made immediately to the partners.
The following statement of financial position reveals more information about the partnership:
Additional Information:
The following amounts were received as sales proceeds from the assets sold:
2. Provision was made for dissolution expenses of ₦7,700.
3. Outstanding credit suppliers were paid amounts due to them. On 31 March 2015, the bank of the partnership received the interest of ₦800 on the bank overdraft.
4. Dissolution expenses amounted to ₦6,900 and these were paid on 31 March 2015.
Required: Prepare the Statements showing how the cash from the assets realised will be distributed between the partners.
See the suggested answer to practice activity 11.18 here.
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