Carmella and Luciana practice in partnership as accountants. Interest on fixed capital balances is allowed at 8% per annum and the remaining profits are shared equally. The following Trial balance was extracted from the ledger at the year ended 31st December 2020: Sh. Sh. Bank 294,000 Fixed capital: Carmella 1,500,000 Luciana 800,000 Current Accounts: Carmella 68,000 Luciana 74,000 Fees invoiced to clients 10,490,000 Rent of office Premises 1,210,000 Motor vehicles at cost 1,840,000 Accumulated Depreciation on motor vehicles 460,000 Current Accounts unpaid 1,690,000 Creditors 91,200 Salaries of employees 4,521,700 Stationery 209,400 Insurances 262,000 Telephone 102,000 Heat and light 293,800 Motor vehicles running costs (excluding depreciation) 513,400 Interest on bank overdraft 22,400 Computer equipment at cost 840,000 Drawings: Carmella 1,062,000 Luciana 1,011,100 Staff training costs 199,400 13,777,200 13,777,200 The following additional matters are to be taken into account: 1) Rent due, but unpaid, amounts to sh.110,000 2) Insurances are prepared by sh.39,000 3) Motor vehicles are to be depreciated at 25% on cost per annum. 4) Computer equipment is to be depreciated on a straight line basis over 2 years. No scrap value is foreseen. 5) Stationery stocks amount to sh. 21,100 Required: Prepare the Income Statement of the partnership (including the appropriation section) for the year ended 31st December 2020 and a partnership Statement of Financial Position in the vertical format as at the date.
Carmella and Luciana practice in
Sh. Sh.
Bank 294,000
Fixed capital: Carmella 1,500,000
Luciana 800,000
Current Accounts: Carmella 68,000
Luciana 74,000
Fees invoiced to clients 10,490,000
Rent of office Premises 1,210,000
Motor vehicles at cost 1,840,000
Current Accounts unpaid 1,690,000
Creditors 91,200
Salaries of employees 4,521,700
Stationery 209,400
Insurances 262,000
Telephone 102,000
Heat and light 293,800
Motor vehicles running costs
(excluding depreciation) 513,400
Interest on bank overdraft 22,400
Computer equipment at cost 840,000
Drawings: Carmella 1,062,000
Luciana 1,011,100
Staff training costs 199,400
13,777,200 13,777,200
The following additional matters are to be taken into account:
1) Rent due, but unpaid, amounts to sh.110,000
2) Insurances are prepared by sh.39,000
3) Motor vehicles are to be depreciated at 25% on cost per annum.
4) Computer equipment is to be depreciated on a straight line basis over 2 years. No scrap value is foreseen.
5) Stationery stocks amount to sh. 21,100
Required:
Prepare the Income Statement of the partnership (including the appropriation section) for the year ended 31st December 2020 and a partnership
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