Accounting 9706 · AS & A Level · Business acquisition and merger

Business acquisition and merger — practice question

Jenny and Thomas, both sole traders, agreed to combine their businesses by forming a partnership with effect from 1 April 2019.
(a)[8]

At 31 March 2019, prepare the revised capital account for each sole trader to show the transfer into the partnership.

(b)[2]

Calculate how much additional cash each partner introduced.

(c)[6]

Prepare the opening statement of financial position for the new partnership on 1 April 2019.

(d(i))[3]

Calculate Jenny’s total share of the expected profit in the first year of trading.

(d(ii))[2]

State one advantage and one disadvantage for Jenny of forming a partnership.

(e)[4]

State two advantages and two disadvantages for a business of using a computerised accounting system.

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