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Fac1601 Assignment 2 Semester 1 2023
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FAC 1601ASSIGNMENT 2 SEMESTER 1 2023
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,Question1
Which of the following statements is correct:
1. Goodwill is excluded in the calculation when determining the fair value of a partnership.
2. A personal transaction is a transaction that is made between an existing partner and the partnership ofthe business entity.
3. When revaluing an asset or liability in terms of a change in ownership structure, the current account is used. The current
account is then closed off to the accounts of the existing partners according to their existing profit-sharing ratio.
4. The selling price of a partnership is determined by the cost price of the partnership.
5. Past financial performance indicators such as total comprehensive income in respect of previousfinancial periods, are
ordinarily used to determine goodwill.
Question 2
Vogel and Mazibuko are in a mining partnership with a profit-sharing ratio of 1:3 respectively. A new partnership was
formed by admitting Malikane. A 1/6 share in the profits/loss of the new partnership was obtained by Malikane. Vogel and
Mazibuko agreed to relinquish the 1/6 share according to their previous profit-sharing ratio of 1:3. The new profit-sharing
ratio is:
1. 1:3:6
2. 8:16:5
3. 5:15:4
4. 7:18:6
5. 3:13:2
Clear my choice
, Which of the following statements is incorrect:
1. Goodwill is a non-current tangible asset in the statement of financial position.
2. Goodwill is an asset representing the future economic benefits arising from other assets that are not capable of being individually
identified and separately recognised.
3.
The change in the ownership structure of a partnership can be accomplished using two accounting procedures based on two distinct
perspectives namely the legal and the going-concern perspective.
4. A transferal account is used to close off the accounting records of the existing partnership.
5.
Goodwill is subsequently measured at cost less impairment.
Clear my choice
Question 4
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Which of the following statement(s) is/are correct:
1. If a current account has a debit balance when closing, the journal entry would be to debit the current account and credit the capital
account.
2.
A retired or deceased partner does not receive a share of the revaluation surplus account according to the profit-sharing ratio.
3. When admitting a new partner, the accounts to be disclosed in the statement of financial position are closed off to a transferal account.
4.
In the case of a retired/deceased partner, the capital account of the aforementioned partner is closed off to the transferal account.
5. All of the above statements are correct.
Clear my choice
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