Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

Refer to Source A2 in the Insert.
(a)[6]

Calculate the net sum that Amir and Ishan owe Raj.

(b)[12]

Prepare the statement of financial position for the new partnership as at 1 July 2019. Use the next page for your workings.

(c)[4]

Explain two reasons why Amir and Ishan would choose to borrow from Raj rather than from the bank.

(d)[3]

Advise whether Amir, Ishan and Raj ought to admit Lala as a partner. Support your answer with reasons.

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