114 Accounting: Business Reporting for Decision Making
Freckles — Charley Bucket
Balance sheet as at 30 June 2016Current assets
Cash at bank
Cash on hand$19 680
6 400
Non-current assets
Shop fittings
Display case20 000
12 800
Total assets 58 880
Current liabilities
Accounts payable 3 680
Total liabilities 3 680
Net assets $55 200
Equity
Capital — C. Bucket
Profit20 000
35 200
Total equity $55 2003.2 Hellen and Jenny agree to form a partnership to supply wine to restaurants. The business will
be known as H&J Fine Wines. They agree on the following market values given to them by an
independent valuer:- Hellen’s contribution: cash $15 400; inventory of wine $44 800; furniture $17 500; laptop com-
puter $2000. - Jenny’s contribution: cash $41 000; inventory of wine $8000; accounts payable $1400.
- You are required to prepare the initial balance sheet for H&J Fine Wines as at 1 April 2017, the
date the partnership commenced.
SOLUTION TO 3.2H&J Fine Wines
Balance sheet as at 1 April 2017Current assets
Cash
Inventory$ 56 400
52 800
Non-current assets
Furniture
Laptop computer17 500
2 000
Total assets 128 700
Current liabilities
Accounts payable 1 400
Total liabilities 1 400
Net assets $127 300
Partners’ equity
Capital
— Hellen
— Jenny79 700
47 600
Total partners’ equity $127 300