Beautiful, Udo and Joseph are in partnership, trading as Blessing, Udo, Joseph & Co. In the partnership, profits or losses are shared in the proportion of 3:2:1. The statement of financial position as at 31 December 2014 is presented subsequently:
The new company is Stable Vine Limited. The assets were taken over at the following values:
₦
Building 145,000
Plant and machinery 25,000
All other assets and liability were taken over at book value. Joseph decided to retire on that date but left his capital as redeemable preference shares at 10% per annum. The preference shares will be redeemed on 31 December 2016. Others received ordinary shares in Stable Ltd for the balance in the capital accounts at ₦1 each.
Required: Prepare the statement of financial position of Stable Vine Ltd after the conversion.
See the suggested answer to practice activity 12.1 here.
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