QUESTION 2 FINANCIAL STATEMENTS OF A PARTNERSHIP (20) The information given belo

Question

QUESTION 2         FINANCIAL STATEMENTS OF A PARTNERSHIP        (20)

The information given below was extracted from the accounting records of Vampesy Traders, a partnership business with Vam and Pesy as partners.

REQUIRED

Prepare the Statement of Changes in Equity for the year ended 28 February 2018

INFORMATION

BALANCES IN THE LEDGER ON 29 FEBRUARY 2018

The following must be taken into account:

(a) The net profit according to the Profit and Loss account amounted to R500 000 on 28 February 2018.

(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: The partners increased their capital contributions by R100 000 each on 01 March 2017. The capital changes have been recorded.

The partners are entitled to the following monthly salaries:

Vam R10 000

Pesy R12 000  

Vam is entitled to a special bonus of 10% of the net profit.

Vam and Pesy share the remaining profits or losses equally

Debit Credit R R Capital:Vam 400 000 Capital:Pesy 300 000 Current a/c:Vam(01 March 2017) 40 000 Current a/c:Pesy(01 March 2017) 20 000 Drawings:Vam 250 000 Drawings:Pesy 150 000

Explanation / Answer

calculation of change in equity

parti. vam. pesy.   

op capital. 400000. 300000

op current 40000. 20000

income(note1) 40500. 40500

drawing. (250000) (150000)

total. 230500. 210500

note 1 calculations of income

it is assumed that partner is entitled to commission before any appropriations to partner I.e before int and remuneration to partner

income. 500000

less comm. 50000

remu. 264000

int. 105000

   ttotal. 81000

parti v p

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---