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Prepare all journal entries required to close off the old partnership (30 Marks).

Jones and Smith Partnership The following balances occur in the books of Jones and Smith who currently share profits/losses equally. The given balances as at 30 June 2020 are: Description Carrying amount New values due to change in partnership ownership 3 000 2 000 Capital Jones Capital: Smith Current account: Jones (Dr) Current Smith (Cr) 100 200 General reserve 1 000 2 400 5 000 8 000 Trade Accounts payable Land and buildings Trade Accounts Receivable Bank (Dr) 1 500 500 Provision for credit losses 300 1 500 1 200 Inventories Goodwill 2 100 Jones and Smith will withdraw or pay in sums of money so that their net interest in the old partnership will be R5 000 each. On the 1st of July they admit Brown as a partner and, according to the new partnership agreement, he has to deposit a capital sum of R5 000 in the partnership's bank account. The partners decided that the general reserve should be re-instated in the books of the new partnership The new partners will share profits and losses equally and the new partnership will be known as JSB Partners Jones and Smith Partnership The following balances occur in the books of Jones and Smith who currently share profits/losses equally. The given balances as at 30 June 2020 are: Description Carrying amount New values due to change in partnership ownership 3 000 2 000 Capital Jones Capital: Smith Current account: Jones (Dr) Current Smith (Cr) 100 200 General reserve 1 000 2 400 5 000 8 000 Trade Accounts payable Land and buildings Trade Accounts Receivable Bank (Dr) 1 500 500 Provision for credit losses 300 1 500 1 200 Inventories Goodwill 2 100 Jones and Smith will withdraw or pay in sums of money so that their net interest in the old partnership will be R5 000 each. On the 1st of July they admit Brown as a partner and, according to the new partnership agreement, he has to deposit a capital sum of R5 000 in the partnership's bank account. The partners decided that the general reserve should be re-instated in the books of the new partnership The new partners will share profits and losses equally and the new partnership will be known as JSB Partners

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