John and Peter are in partnership sharing profits and losses in the ratio 3/5: 2/5, respectively. The following is their trial balance as of 31 December 2007. Dr Cr $ $ Buildings (cost $105,000) 80,000 Fixtures at cost 4,100 Provision for depreciation: Fixtures 2,100 Debtors 30,700 Creditors 13,295 Cash at bank 3,065 Stock at 01 January 2008 31,370 Sales 181,555.50 Purchases 105,000 Carriage outwards 1,705 Discounts allowed 310 Loan interest: M. Money 1,950 Office expenses 2,380 Salaries and wages 28,904.50 Bad debts 816 Provision for doubtful debts 700 Loan from M. Money 32,500 Capitals: Shoes 50,000 Socks 37,500 Current accounts: Shoes 2,050 Socks 600 Drawings: Shoes 15900 Book 14,100 320,300.5 320,300.5 i. Stock, 31 December 2008, $35,105 ii. Expenses to be accrued: Office Expenses $107.50; Wages $360 iii. Depreciate fixtures 15 percent on reducing balance basis, buildings $2,500 iv. Reduce provision for doubtful debts to $625 v. Partnership salary: $15,000 to Shoes. Not yet entered vi. Interest on drawings: Shoes $450; Socks $300 vii. Interest on capital account balances at 5 percent Required: Prepare a trading and profit and loss appropriation account for the year ended 31 Dec. 2007 and a balance sheet extract showing the Financing of the business as of that date
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
John and Peter are in
The following is their
Dr Cr
$ $
Buildings (cost $105,000) 80,000
Fixtures at cost 4,100
Provision for depreciation: Fixtures 2,100
Debtors 30,700
Creditors 13,295
Cash at bank 3,065
Stock at 01 January 2008 31,370
Sales 181,555.50
Purchases 105,000
Carriage outwards 1,705
Discounts allowed 310
Loan interest: M. Money 1,950
Office expenses 2,380
Salaries and wages 28,904.50
Provision for doubtful debts 700
Loan from M. Money 32,500
Capitals: Shoes 50,000
Socks 37,500
Current accounts: Shoes 2,050
Socks 600
Drawings: Shoes 15900
Book 14,100
320,300.5 320,300.5
i. Stock, 31 December 2008, $35,105
ii. Expenses to be accrued: Office Expenses $107.50; Wages $360
iii.
iv. Reduce provision for doubtful debts to $625
v. Partnership salary: $15,000 to Shoes. Not yet entered
vi. Interest on drawings: Shoes $450; Socks $300
vii. Interest on capital account balances at 5 percent
Required:
Prepare a trading and
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