QUESTION 4 The information given below was extracted from the accounting records

Question

QUESTION 4 The information given below was extracted from the accounting records of Salmon Traders, a partnership business with Sally and Monty as partners. The financial year ends on the last day of February each year REQUIRED Prepare the following accounts in the General ledger of Salmon Traders: 4.1 Current a/c: Monty (Balance the account.] 4.2 Appropriation account (Close off the account.) PARTNERSHIPS (20) (13) INFORMATION Balances in the ledger on 28 February 2017 Capital: Sally Capital: Monty Current afe: Sally (01 March 2016) Current a/c: Monty (01 March 2016) Drawings: Sally Drawings: Monty 400 000 200 000 20 000 (DR) 33 000 (CR 200 000 180 000 The following must be taken into account la) The net profit according to the Profit and Loss account amounted to R500 000 on 28 February 2017 b) The partnership agreement makes provision for the following Interest on capital must be provided at 15% per annum on the balances in the capital accounts. Note. Sally increased his capital by R100 000 on 01 September 2016. Monty decreased his capital by R100 000 on the same date. The capital changes have been recorded

Explanation / Answer

4.1 Current A/c of Monty for the year ended 28/02/2017

4.2 Profit and Loss Appropriation A/c for the year ended 28/02/2017

Note - The share of profit will be in the ratio of the capital amounts, unless stated otherwise.

Here, the ratio after capital infusion = 5:1

Particulars R Particulars R To Interest on Drawings 27,000 By Balance b/d 33,000 To Drawings 180,000 By Interest on Capital 30,000 To Balance c/d 22,667 By Share of Profit 166,667 Total 229,667 Total 229,667

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---